^ 


REPORT  of  the  PROCEEDINGS 


OF  THE 


Twenty-Second 
Annual  Convention 

The  American  Mining 
Congress 


ST.  LOUIS,  MISSOURI 


NOVEMBER  17  to  21 


1919 


^rr^^ffivH^r^t^r^t^ 


Report  of  the  Proceedings 


OF  THE 


Twenty-second  Annual  Convention 

The 
American  Mining  Congress 


PLANTERS'  HOTEL,  ST.  LOUIS,  MO. 
NOVEMBER  17-21,  1919 


.  V    ; 

National  Industrial  Conference 

National  Gold  Conference 

National  Oil  Shale  Conference 

National  Conference  of  Schools  of  Mines  and  Metallurgy 


National  Exposition  of  Mines,  Mining 
Machinery  and  Safety  Devices 


MADE  BY 

KOHN  &  POLLOCK,  INC. 
BALTIMORE,  MD. 


Proceedings  of 

The   American   Mining   Congress 

Twenty-second  Annual  Session 

PLANTERS'  HOTEL,  ST.  LOUIS,  MO. 


Preliminary  Conferences 

Committee  on  Standardization  of  Mining  Equipment — This  Committee, 
under  the  direction  of  Col.  Warren  R.  Roberts,  of  Chicago,  acting  chair- 
man of  the  General  Committee,  began  its  conferences  on  Saturday, 
November  15,  in  the  Planters'  Hotel.  Sub-committees  and  General  Com- 
mittee met  in  formal  session  on  Sunday,  November  16,  completing  the 
work  of  the  Committee  on  Monday  and  Tuesday,  the  17th  and  18th. 

Informal  Dinner — Nearly  100  delegates  assembled  for  an  informal 
dinner  on  Sunday  evening  and  discussed  plans  for  the  succeeding  days. 


Exposition  Opens 


The  Exposition  of  Mines,  Mining  Machinery  and  Safety  Devices  was 
held  in  the  old  Southern  Hotel,  which  had  been  transformed  into  an 
Exposition  Building  and  Convention  Hall.  This  Exposition  opened  infor- 
mally on  Monday  morning  and  was  formally  declared  open  in  the  after- 
noon. 

The  Congress 

OPENING  SESSION  OF  THE  CONVENTION 

MONDAY,  NOVEMBER  17,  2.30  P.  M. 

The  Convention  and  Exposition  were  opened  jointly  in  the  large 
Convention  Hall  of  the  Exposition  Building,  Capt.  Robert  E.  Lee,  vice- 
chairman  of  the  Exposition  Committee,  presiding  in  the  absence  of 
Chairman  W.  K.  Kavanaugh,  who  was  absent  from  the  city. 

CHAIRMAN  LEE :  I  will  ask  you,  as  a  fitting  opening  for  this  great 
Convention  ahead  of  us,  if  you  will  join  with  the  orchestra  in  singing- 
"America." 


•55440 


*  '  REPORT  OF  PROCEEDINGS 

After  the  singing  of  the  national  anthem  Chairman  Lee  said:  "While 
you  are  standing,  gentlemen,  we  will  have  the  invocation  by  Bishop 
William  E.  Quayle,  of  the  Methodist  Episcopal  Church." 

The  Invocation 

BISHOP  QUAYLE:  O  Lord  God,  we  worship  Thee.  When  our 
reason  stands  level-footed  we  always  worship  God.  He  is  the  God  of 
the  heavens,  He  is  the  God  of  the  earth,  He  is  the  owner  of  all  things. 
The  ground  on  which  we  grow  our  crops  is  His,  the  silver  and  the  gold 
and  the  coal  are  His.  It  is  the  Great  God  who  owns  the  world,  and  we 
are  His  under-servants.  He  is  our  Master.  It  is  well  for  us,  in  these 
eventful  hours,  to  understand  who  owns  the  world;  He  only  loans  it  to 
us,  and  we  borrow  of  Him.  Great  God,  bless  us  as  we  try  to  do  the 
things  in  Thy  world  that  ought  to  be  done.  Keep  us  from  being  super- 
ficial, 0  Lord.  When  other  kings  are  failing  and  faltering,  and  their 
thrones  are  shaking  down,  there  is  only  one  King  who  is  immortal,  the 
God  whom  we  worship  this  hour.  O  Lord,  bless  our  country  in  these 
troublous  hours,  through  Thy  guardianship  and  guidance  of  it  all, 
and  in  these  great  matters  which  these  men,  these  servants  of  Thine, 
shall  administer  when  they  talk  concerning  this  wide  dominion  of  God, 
whereby  all  of  us  are  enriched.  Great  God!  give  us  penetration  of  Thy 
divine  will.  Keep  us  from  the  autocracy  of  labor,  capital  and  politics. 
Keep  us  to  the  divine  democracy  of  the  world  belonging  to  God,  and  the 
world  belonging  to  man.  So  bless  these  men,  may  all  they  do  and  all 
they  think  and  plan  conduce  to  help  God  get  His  right-of-way  in  the 
world. 

God,  bless  the  public,  of  which  we  all  are,  whether  employees  or 
employers.  Remember  that  the  public  is  to  be  served,  and  the  God  of 
the  public  is  to  be  served,  and  no  man  can  take  matters  into  his  own 
hands  without  taking  matters  which  belong  to  God.  Bless  these  men 
in  their  endeavor  to  stabilize  business,  keep  us  from  Sovietism,  keep  us 
to  law  and  order,  and  the  sobriety  of  judgment.  Keep  us  as  one  man 
having  some  property  and  all  of  us  wanting  to  earn  an  honest  livelihood 
and  turn  an  honest  penny  in  the  sight  of  God.  Keep  us  from  being 
Socialists,  so  that  God  shall  have  a  world  in  which  there  are  homes  and 
families  and  husbands  and  wives  and  children,  and  we  shall  worship 
God.  Out  of  the  sweaty  fields  we  shall  come  to  our  homes  to  worship 
God  and  lie  down  and  rest.  Bless  us  all  with  Thy  goodness  and  Thy 
guidance  for  us,  we  pray  Thee,  0  Lord,  for  Jesus  Christ's  sake.  Amen. 

Address  of  Welcome 

CHAIRMAN  LEE:  Ladies  and  Gentlemen:  We  will  now  formally 
open  the  Convention  and  proceed  to  business.  I  am  in  a  peculiar  attitude 
here,  as  the  representative  of  the  Mayor  of  St.  Louis,  who  is  ill,  and  the 
representative  of  Mr.  W.  K.  Kavanaugh,  who  is  detained  in  Washington, 
and  had  hoped  to  be  here  to  welcome  you  in  his  own  inimitable  way.  I 
am  the  representative  of  the  Chamber  of  Commerce,  which  is  very  warm 
in  its  welcome  to  you,  and,  if  you  will  permit  me,  I  am  the  representative 
of  myself,  and  I  would  like  to  welcome  you. 


THE  AMERICAN  MINING  CONGRESS  5 

We,  in  St.  Louis  here,  have  a  penchant  for  visitors;  we  love  com- 
pany; we  like  to  have  folks  like  you,  who  are  important  in  the  world's 
work  and  the  world's  ways,  to  come  here  and  be  "home  folks"  with  us. 
We  would  like  you,  before  you  get  away  from  here,  to  be  in  the  attitude 
of  the  men  in  the  story  which  I  have  heard: 

A  missionary  started  over  for  the  Sandwich  Islands,  or  somewhere 
else,  to  take  white  collars  and  silk  hats  to  the  heathen.  His  ship  was 
wrecked  en  route,  and  he  was  thrown  upon  what  he  supposed  was  a 
cannibal  island.  He  crawled  up  the  sands  in  fear  and  trembling,  and 
when  he  got  toward  the  top  of  a  little  knoll,  he  heard  human  voices  on 
the  other  side  of  the  hill,  and  picturing,  as  a  man  will  in  his  mind,  he 
pictured  on  the  other  side  of  the  hill  40  or  50  great  black,  greasy  can- 
nibals, dancing  around  a  caldron,  and  a  couple  of  his  shipmates  being 
cooked  for  dinner. 

So  he  crawled  a  little  closer  up,  and  then  he  could  distinguish  what 
was  said  on  the  other  side.  He  heard  a  fellow  say:  "Ah,  what's  the 
matter  with  you,  don't  you  know  better  than  to  trump  your  partner's 
ace?"  And  he  said:  "Thank  God,  I'm  among  Christians  anyway." 
[Laughter.]  We  want  you  to  feel  that  you  are  among  your  own  kind 
of  folks,  who  really  enjoy  having  you  here. 

It  is  the  aim  of  the  City  Administration,  the  Chamber  of  Commerce, 
and  these  gentlemen  on  your  Entertainment  Committee  for  the  Mining 
Congress,  to  make  you  feel  that  there  is  no  other  place  that  has  done 
any  better  than  St.  Louis,  and  that  most  of  them  have  not  done  half  as 
well  toward  entertaining  you  and  making  you  feel  at  home. 

I  want  now  to  present  to  you  for  an  address,  in  behalf  of  the  Missouri 
Associated  Industries,  Mr.  Elmer  Donnell,  who  is  the  general  manager 
of  the  Associated  Industries  of  Missouri. 

MR.  DONNELL:  Mr.  Chairman,  Delegates  to  The  American  Mining 
Congress,  Ladies  and  Gentlemen:  I  keenly  regret  the  illness  of  Mr. 
Albert  Davis,  the  president  of  the  Associated  Industries  of  Missouri, 
because  I  think  he  would  make  a  better  speech  than  I  in  welcoming  you 
to  this  Convention 

Appreciating  to  the  fullest  extent  the  high  honor  your  officers  have 
done  in  placing  the  Associated  Industries  of  Missouri  at  the  forefront 
of  your  program,  I,  as  a  representative  of  the  sound,  conservative  busi- 
ness establishments  of  Missouri,  am  pleased  to  welcome  you,  the  delegates 
to  The  American  Mining  Congress  and  the  Industrial  Conference,  to  St. 
Louis  and  to  Missouri. 

Missouri  Becoming  Industrial  Center 

Missouri  has  made  wide  strides  in  industrial  production  during  the 
past  few  years,  and  if  the  number  of  concerns  v/hich  locate  here  shall 
increase  as  rapidly  in  the  next  few  years  as  they  have  in  the  past 
period,  Missouri  will  shortly  be  known  as  one  of  the  great  industrial 
States  of  the  Union. 

As  an  instance  of  our  progress,  may  I  cite  to  you  the  increased  value 
of  manufactured  products  in  this  State  since  1916?  These  figures  are 


6  REPORT  OF  PROCEEDINGS 

furnished  by  the  State  Bureau  of  Labor  and  Statistics.  In  1916  the 
value  of  products  manufactured  in  Missouri  was  $905,575,717;  in  1917 
that  amount  had  increased  to  $1,250,000,000;  in  1918  the  value  of  these 
products  reached  $1,500,000,000.  And  when  the  figures  are  out  for  1919 
we  expect  a  great  increase  over  any  preceding  year. 

The  eyes  of  the  manufacturing  world  are  focused  on  Missouri  as  an 
ideal  location  for  new  industrial  enterprise.  This  State  is  almost  the 
exact  geographical  center  of  commerce.  In  addition  to  its  great  railway 
transportation  facilities,  it  has  free  and  easy  access  to  the  two  greatest 
waterways  in  the  United  States,  the  Mississippi  and  Missouri  Rivers. 

Interested  in  Convention 

I  make  brief  mention  of  these  industrial  facts  in  order  that  you  may 
know  that  the  people  of  Missouri  are  vitally  interested  in  your  delibera- 
tions. The  questions  which  are  to  be  discussed  at  this  conference  are 
on  subjects  of  not  only  vital  importance  to  the  men  interested  in  metal- 
lurgy and  mining,  but  to  all  classes  of  business  men  who  must  depend 
upon  production. 

The  millions  of  men,  women  and  children  who  belong  to  the  con- 
suming class,  and  the  men  who  earn  their  living  by  labor,  are  now  study- 
ing and  discussing  the  grave  problems  of  production,  upon  the  proper 
solution  of  which  must  depend  the  cost  of  the  necessities  of  life. 

The  Associated  Industries  of  Missouri  has  planned  and  will  con- 
tinue to  build  its  influence  on  the  solid  rock  of  Americanism.  We  are 
ready  to  fight  to  the  last  ditch  those  interests  which  would  defy  law, 
destroy  government,  wreck  our  institutions  and  control  industry.  [Ap- 
plause.] Bolshevism,  I.  W.  W.-ism,  and  anarchy  must  be  entirely  elimi- 
nated from  the  life  of  this  nation.  [Applause.] 

If  you  will  bear  with  me  for  just  one  moment,  I  would  like  to  read 
to  you  the  principles  of  the  Associated  Industries  of  Missouri,  unani- 
mously adopted  at  a  recent  meeting  of  the  Board  of  Directors  in  the 
city  of  St.  Joseph.  You  must  remember  that  the  Associated  Industries 
is  made  up  of  the  large  business  concerns  of  this  State. 

Missouri  Platform 

To  stand  for  100  per  cent.  Americanism  and  pledge  the  mem- 
bership of  this  Association  to  use  every  effort  to  secure  the  full 
Americanization  of  all  alien  employees. 

To  unite  for  the  purpose  of  developing  the  industries  of  Mis- 
souri, and  to  co-operate  in  matters  affecting  their  interest. 

To    obtain    State    and    National    interest    in    the    industrial 

? regress  and  advantages  of  Missouri,  and  pledge  ourselves  in 
avor  of  development  of  efficient  highway  and  waterway  trans- 
portation. 

To  interest  men  of  industries  in  the  political  duties  of  citizen- 
ship, and  to  encourage  them  to  express  their  opinions  on  the 
work,  and  to  work  for  constructive  legislation. 

To  preserve  the  economic  freedom  of  the  worker  and  em- 
ployer, to  resist  any  attempt  to  restrict  the  rights  of  men  to 
choose  where  and  upon  what  terms  they  will  work,  and  to 
insist  upon  the  right  of  industry  to  employ  whom  it  chooses. 

To  encourage  co-operation  between  employers  and  employees 
to  their  mutual  interest. 


THE  AMERICAN  MINING  CONGRESS  7 

I  quote  this  declaration  in  order  that  you  may  know  the  attitude  of 
the  business  men  of  Missouri,  who  have  co-operated  with  and  sup- 
ported your  officers  to  endeavor  to  make  this  Convention  one  of  unquali- 
fied success.  We  believe  that  your  discussions  will  be  of  enormous 
educational  value  to  the  public  at  large,  and  we  hope  that  the  decisions 
arrived  at  will  have  a  large  influence  in  solving  the  great  problems  which 
have  created  and  continue  to  encourage  the  industrial  and  political  unrest 
of  today. 

In  closing,  may  I  once  again  proclaim  to  you  a  hearty  and  sincere 
welcome  from  every  business  man  in  Missouri,  and  may  your  endeavors 
be  crowned  with  the  success  they  so  richly  deserve! 

CHAIRMAN  LEE:  Ladies  and  Gentlemen:  On  behalf  of  the  State 
of  Missouri,  which  is  fourth  in  most  things,  and  we  Missourians  think 
first  in  nearly  everything  else,  I  want  to  present  for  an  address  of 
welcome  former  United  States  Senator  Xenophon  P.  Wilfley,  of  St. 
Louis.  [Applause.] 

(Mr.  Wilfley's  address  will  appear  on  page  234.) 

CHAIRMAN  LEE:  The  very  apt  story  which  the  Senator  told  you 
about  his  colored  friend  reminded  me  of  one  that  might  illustrate  the 
present  situation:  a  negro  soldier  was  standing  back  of  the  trenches  on 
the  other  side,  during  the  war,  and  a  great  big  German  shell  came 
hissing  over  and  hit  the  ground  about  14  feet  in  front  of  him,  but  it 
did  not  explode;  so  after  getting  himself  under  control,  he  got  his 
"bones"  out  and  tossed  them  over  to  the  shell  and  said:  "From  now  on 
I  am  going  to  be  a  better  man." 

We  shall  have  the  pleasure  and  honor  to  hear  responses  to  these 
addresses  which  we  have  just  had,  and  an  address  by  the  president  of 
the  American  Mining  Congress,  Mr.  Bulkeley  Wells. 

The  President's  Address 

MR.  WELLS :  Mr.  Chairman  and  All  the  Guests :  We  thank  you  for 
your  cordial  welcome.  We  have  come  to  St.  Louis  with  serious  thoughts 
in  our  minds,  but  with  firm  determination  to  deserve  well  of  your  hospi- 
tality through  bending  our  best  efforts  to  the  solution  of  our  problems, 
which  are  yours  as  well. 

(The  address  of  Mr.  Wells  will  appear  on  page  239.) 

CHAIRMAN  LEE:  In  honor  of  our  own  true  and  pure  American 
spirit,  let  us  join  in  "The  Star-Spangled  Banner." 

(Delegates  joined  in  singing  "The  Star-Spangled  Banner.") 

CHAIRMAN  LEE:  An  address  in  behalf  of  the  United  States  Gov- 
ernment by  the  Director  of  the  United  States  Bureau  of  Mines,  and  the 
personal  representative  of  the  Hon.  Franklin  K.  Lane,  Secretary  of  the 
Interior,  Dr.  Van  H.  Manning,  the  Director  of  the  Bureau. 

The  United  States  Bureau  of  Mines 

DR.  VAN  H.  MANNING :    Ladies  and  Gentlemen :    I  feel  that  I  should 


8  REPORT  OF  PROCEEDINGS 

make  some  apology  for  the  address  which  I  am  going-  to  read  to  you 
today,  because  it  will  be  somewhat  dry.  I  am  one  of  those  public  officials 
who  are  a  little  bit  afraid,  at  this  time,  to  discuss  the  industrial  and 
economic  unrest;  therefore,  I  have  prepared  a  statement  of  the  activi- 
ties of  the  Bureau  of  Mines,  and  tried  to  put  up  to  you  gentlemen  some- 
thing in  concrete  form,  which  I  want  you  to  take  home  and  consider. 
(Dr.  Manning's  address  will  appear  on  page  244.) 

! 

Declares  Exposition  Open 

Director  Manning  continued,  saying:  Mr.  Chairman,  I  have  been 
requested  to  formally  announce  the  opening  of  the  Exposition;  there- 
fore, on  behalf  of  The  American  Mining  Congress,  the  Chamber  of  Com- 
merce, and  the  affiliated  bodies  in  St.  Louis,  the  Secretary  of  War,  the 
Secretary  of  the  Interior  and  those  contributors  of  this  Exposition,  I  now 
announce  the  formal  opening  of  the  Exposition. 

CHAIRMAN  LEE:  I  want  to  call  your  attention  to  the  Exposition 
also,  just  a  word  about  that.  That  Exposition  will  actually  be  in  full 
operation  at  6.30  o'clock  this  evening,  and  we  hope,  with  every  exhibit 
in  place,  there  may  be  a  broom  standing  somewhere  or  a  nail  that  was 
not  driven  in  quite  where  it  should  go,  but  in  the  main  the  Exposition 
will  be  right  and  well  worthy  of  your  careful  inspection.  We  bespeak 
that  on  behalf  of  the  many  exhibitors  who  have  gone  to  a  great  deal 
of  trouble  to  prepare  what  we  think  is  a  wonderful  exhibit  applying  to 
the  mining  industry. 

I  want  to  present  to  you  "Our  Secretary" — may  I  use  it  that  way?— 
Mr.  James  F.  Callbreath.  [Applause.] 

SECRETARY  CALLBREATH:  Mr.  Chairman  and  Members  of  The 
American  Mining  Congress:  I  am  delighted  to  be  called  "Our  Secre- 
tary." I  have  been  accused  of  being  short  on  terminal  facilities  when 
I  speak  to  an  audience,  and,  therefore,  I  think  I  had  better  be  like  the 
one  who  said:  "If  I  am  so  soon  to  be  done,  for  what  was  I  done?" 
[Laughter.] 

I  am  not  going  to  carry  out  what  our  president  said  I  would  do,  in 
outlining  plans,  etc.,  because  I  know  you  want  to  eat  your  dinners  this 
evening,  and  we  have  a  lot  of  important  business  to  transact  between 
times.  Therefore,  I  will  take  the  first  opportunity  to  say  that  I  am  not 
going  to  talk  to  you.  Some  other  time  of  the  meeting  I  shall  be  glad, 
along  these  various  subjects,  to  say  a  few  words  to  you,  but  the  important 
part  of  this  Convention  is  the  work  done  by  the  Resolutions  Committee, 
and  instead  of  talking  to  you,  I  think  we  had  better  proceed  to  the 
selection  of  the  Resolutions  Committee,  which  I  think  is  the  most  im- 
portant thing  to  do. 

Selecting  Resolutions  Committee 

According  to  our  By-Laws,  which  were  so  arranged  as  to  take  the  selec- 
tion away  from  the  Mining  Congress,  it  is  necessary  for  the  delegates  of 
each  State  to  select  their  member  of  the  Resolutions  Committee,  so  that 


THE  AMERICAN  MINING  CONGRESS  9 

the  resolutions  reported  to  the  Convention  shall  be  the  best  thought  of 
the  people  who  come  to  the  Convention,  rather  than  those  who  have  in 
charge  the  general  work.  In  other  words,  we  want  you  to  come  and 
tell  us  what  you  want  us  to  do  during  the  ensuing  year.  As  I  said,  the 
Resolutions  Committee  is  made  up  of  one  man  representing  each  State 
and  Territory  within  our  jurisdiction,  and  I,  therefore,  am  going  to  call 
the  roll.  I  am  going  to  ask  (unless  some  different  plan  is  proposed 
to  select  the  members  of  our  Resolutions  Committee)  that,  if  there 
is  any  State  here  whose  delegation  is  not  present  and  you  prefer  to 
have  a  meeting  later  in  the  evening,  you  will  so  announce,  and  announce 
the  place  where  that  meeting  shall  be  held,  in  order  that  your  associates 
in  that  delegation  may  know  the  place  of  the  meeting.  The  Chair  will 
be  glad  to  pursue  that  course.  I  will  call  the  roll  of  States  and  ask 
each  State  to  assemble  at  some  point  in  the  hall,  unless  some. one  from 
the  delegation  asks  that  a  different  course  be  pursued. 

(The  secretary  then  called  the  roll  of  States  and  several  delegations 
announced  members  of  the  committee.) 

SECRETARY  CALLBREATH:  Are  there  any  other  States  that  have 
been  overlooked?  I  am  glad  that  the  last  name  mentioned  was  James  T. 
Lloyd,  ex-Congressman  of  Missouri,  because  I  want  to  say  that,  in  the 
great  fight  for  the  Bureau  of  Mines,  James  T.  Lloyd  was  one  of  the 
most  helpful  men  in  Congress  in  carrying  on  that  fight.  I  have  seen 
him  but  once  from  the  day  that  we  first  interviewed  him  until  today, 
when  he  came  here,  but  I  have  talked  to  him  over  the  phone,  and  he 
never  missed  fire  when  we  wanted  him  in  his  seat  in  Congress,  on  the 
floor — he  was  always  there. 

Those  States  that  have  not  reported  will  kindly  hand  in  their  reports 
in  the  morning.  I  want  to  announce  that  the  meeting  this  evening  will 
discuss  one  of  the  very  important  problems  for  the  mining  fraternity. 
I  want  to  say  something  which  some  of  you  may  not  fully  comprehend: 
That  the  mining  industry  furnishes  58  per  cent,  of  the  total  tonnage 
handled  by  the  railroads,  and,  therefore,  we,  as  mining  men,  are  inter- 
ested in  the  handling  of  the  railroads  of  this  country. 

Better  Railroad  Management 

We  are  interested  to  see  that,  instead  of  having  a  deficit  amounting  to 
$500,000,000  a  year,  upon  a  business  which  was  larger  than  ever  before 
in  history,  and  upon  which,  with  a  freight  rate  25  per  cent  increased 
and  the  passenger  rate  50  per  cent,  increased  over  pre-war  times,  the 
railroads  will  be  put  under  such  management  as  will  decrease  our  freight 
rates,  because  the  mining  industry  is  more  greatly  interested  in  proper 
freight  rates  than  any  other  industry,  and,  therefore,  the  discussion  this 
evening  will  be  of  particular  benefit  to  you,  and  I  hope  you  will  be  here 
and  hear  every  word  that  is  said. 

The  show  downstairs  is  important;  we  want  you  to  see  every  exhibit. 
We  want  the  men  who  have  taken  pains  to  come  here  and  show  you 
machinery  to  have  an  opportunity  to  show  what  they  have,  but  we  do 
not  want  you  to  pay  so  much  attention  that  you  cannot  hear  the  ad- 


10  REPORT  OF  PROCEEDINGS 

dresses  this  evening  from  the  best  men  in  the  country  along  that  line. 
I  hope  you  will  be  on  hand  promptly  this  evening. 

The  Credentials  Committee 

The  president  requests  me  to  announce  the  Credentials  Committee  as 

follows : 

W.    A.    McCutcheon Pittsburgh 

A?  C.  Morrison New  York 

H.  A.   Buehler Missouri 

It  will  be  the  duty  of  the  Credentials  Committee  to  examine  the  reports 
of  the  credentials  to  see  who  is  properly  seated  in  this  Convention. 

Thirty-one  States  Represented 

ASSISTANT  SECRETARY  BURNS:  There  are  31  States  now  repre- 
sented in  the  Convention,  and  by  actual  registration  more  than  700  dele- 
gates at  this  time. 

May  I  take  the  liberty  of  announcing  two  features  of  the  program 
which  will  demand  your  immediate  or  early  attention?  One — the  Pre- 
liminary Industrial  Conference  Dinner  tonight  at  the  Planters'  Hotel. 
It  should  be  well  attended  by  the  employers  of  labor. 

In  behalf  of  the  local  Entertainment  Committee,  allow  me  to  make  a 
special  announcement  in  addition  to  the  printed  announcement  for  the 
"General  Dinner  for  Delegates,"  to  be  given  on  Wednesday  evening  in 
the  large  dining  room  at  the  Planters'  Hotel.  The  seats  will  be  limited 
to  700.  The  delegates  will,  of  course,  pay  for  their  own  tickets,  as  is 
usual  in  such  cases. 

There  will  be  some  entertainment  furnished  by  the  local  committee. 
The  Governor  of  this  State,  who  has  been  solidly  back  of  the  invitations 
and  who  has  personally  written  to  a  large  number  of  representative  men 
throughout  the  nation,  inviting  them  here,  is  to  make  an  address.  We 
will  have  with  us  also  two  or  three  distinguished  representatives  of 
European  governments,  and  an  address  probably  by  a  most  distinguished 
European  mining  engineer  at  this  dinner. 

PRESIDENT  WELLS:  The  Convention  will  now  stand  adjourned 
until  8  o'clock  this  evening. 

ADJOURNMENT. 


SECOND  GENERAL  SESSION 

EXPOSITION  HALL,  MONDAY,  NOVEMBER  17,  8.30  P.  M. 
PRESIDENT  BULKELEY  WELLS,  PRESIDING. 

CHAIRMAN   WELLS:      The   Convention   will   come   to   order.     The 
secretary  of  the  Convention  has  some  announcements  to  make. 


THE  AMERICAN  MINING  CONGRESS  11 

Program  Announcements 

ASSISTANT  SECRETARY  BURNS:  I  wish  to  make  a  special 
announcement  in  addition  to  the  formal  announcements  in  the  printed 
program,  of  the  program  arranged  for  the  Conference  of  Colleges  of 
Mines  and  Mining,  tomorrow  afternoon  in  Parlor  "A"  of  the  Planters' 
Hotel.  This  Conference  has  been  called — the  first  of  its  kind  in  the 
United  States — by  a  committee  of  directors  and  officers  of  schools  of 
mines  and  metallurgy,  with  the  expectation,  I  understand  from  the  pro- 
moters of  the  meeting,  that  eventually  there  will  be  organized  an  asso- 
ciation which  shall  meet  annually  with  The  American  Mining  Congress. 

The  program  tomorrow  afternoon,  beginning  at  2.30  o'clock,  will  be: 
an  address,  "The  Amount  and  Kind  of  Business  Training,  Including 
Economics,  Cost  Accounting  and  Business  Organization,  to  Be  Taught  in 
the  Mining  and  Metallurgy  School  Curriculum,"  by  Louis  E.  Young,  of 
the  Union  Electric  Company,  St.  Louis;  an  address,  "Closer  Co-operation 
Between  the  United  States  Bureau  of  Mines  and  Industrial  Corporations 
in  Research  Investigations,"  by  E.  A.  Holbrook,  superintendent  of  the 
United  States  Bureau  of  Mines,  stationed  at  Pittsburgh,  and  an  address, 
"The  National  Temperamental  Characteristics  of  Labor,  Making  the 
Nationalities  Suitable  for  Mine  Work,"  by  T.  T.  Reed,  of  the  Bureau  of 
Mines,  Washington. 

Entertainment  for  Ladies 

The  local  Committee  on  Arrangements  wishes  me  to  announce  the 
arrangements  for  the  entertainment  of  the  ladies  attending  the  Con- 
vention, or  ladies  accompanying  delegates.  A  Special  Committee  of  15 
St.  Louis  ladies  will  meet  the  delegates  or  visitors  at  the  Statler  Hotel 
at  6  o'clock  Wednesday  evening.  Thirty  minutes  will  be  spent  in  getting 
acquainted  during  an  informal  reception,  to  be  followed  by  a  dinner  at 
the  Statler  and  a  theatre  party  at  8  o'clock.  There  are  a  few  ladies 
already  registered,  I  think  about  20.  We  believe  that  there  will  be  a 
great  many  ladies  in  the  city  accompanying  delegates,  and  the  local 
committee  will  take  very  great  pleasure  in  being  able  to  get  these  ladies 
acquainted  with  the  St.  Louis  women  in  charge  of  entertainment.  Will 
you  please  see  that  the  ladies  with  you  or  with  your  friends  are  registered 
before  Wednesday  afternoon  at  3  o'clock,  if  at  all  possible? 

It  is  possible  that,  if  the  weather  is  proper  on  Thursday  afternoon,  the 
ladies  will  be  given  an  automobile  drive  about  the  city. 

Mr.  Kavanaugh,  chairman  of  the  Exposition  Committee,  telegraphs 
today  as  follows:  "When  compelled  account  of  very  urgent  matters  to 
leave  St.  Louis,  I  had  no  idea  would  be  tied  up  in  Washington.  I  hope  to 
be  home  Wednesday.  Would  not  you  kindly  say  to  the  gentlemen  on 
the  committee  and  to  the  delegates  how  badly  I  feel  over  my  enforced 
absence?  But  I  know  that  matters  are  in  good  hands  and  the  Exposition 
and  Convention  will  be  a  great  success."  Mr.  Kavanaugh  has  worked 
most  constantly  and  faithfully  in  trying  to  make  this  Convention  and 
Exposition  a  success,  and  at  the  last  hour  was  called  to  the  Capital. 


12  REPORT  OF  PROCEEDINGS 

War  Minerals  Relief  Commission 

I  am  requested  to  make  a  special  announcement  of  the  fact  that  the 
War  Minerals  Commissioners  are  to  hold  two  sessions,  tomorrow  and 
the  following  day,  in  this  city.  They  have  not  yet  announced  a  place 
for  those  sessions,  but  I  assume  that  they  will  be  in  the  headquarters 
hotel,  the  Planters'.  The  Commissioners  desire  to  meet  claimants  against 
the  War  Minerals  Relief  Fund. 

Congressman  Strong  to  Speak 

Congressman  Strong,  of  Kansas,  who  accepted  an  invitation  to  address 
the  Gold  Conference  and  also  the  General  Conference,  telling  the 
story  of  Alaska,  will  arrive  here  in  time  for  the  dinner  Wednesday 
evening.  The  Congressman  has  to  leave  late  in  the  evening  to  return 
to  his  duties  in  Washington,  but  has  been  kind  enough  to  make  the  trip 
from  Washington  to  spend  five  hours  with  this  Convention. 

Senator  Henderson,  who  was  the  very  able  chairman  of  the  Senate 
Committee  on  Mines  and  Mining  in  the  last  session,  who  is  now,  and 
probably  always  will  be,  deeply  interested  in  mining  in  the  West,  was 
detained,  as  all  Senators  are,  on  very  important  business,  but  wires 
that  he  will  be  here  later  in  the  week  if  the  vote  is  taken  on  the  treaty, 
as  is  now  expected  will  be  the  case. 

The  same  announcement  is  necessary  in  connection  with  Senator  Pom- 
dexter,  who  was  to  speak  tomorrow  morning  about  11  o'clock  on  "Who 
is  the  Government?"  Mr.  Poindexter  has  a  wonderful  message.  As  a 
member  of  the  Senate  Investigating  Committee,  looking  into  the  develop- 
ment of  Bolshevism  in  this  country,  he  has  accumulated  a  fund  of  star- 
tling facts,  and  those  facts  will  probably  be  told  to  the  Convention  by  Mr. 
Poindexter  himself.  Owing  to  his  inability  to  be  at  the  Convention,  we 
have  been  obliged  to  change  tomorrow's  program.  In  the  morning  at 
10  o'clock,  in  this  room,  Mr.  Parker,  director  of  the  Anthracite  Bureau 
of  Information,  of  Philadelphia,  will  discuss  labor  conditions  in  the 
anthracite  industry.  He  will  be  followed  by  Dr.  George  Otis  Smith, 
director  of  the  United  States  Geological  Survey. 

Economic  Problems 

This  will  be  followed  by  an  open  discussion  the  remainder  of  the  time 
on  two  important  and  vital  questions  at  this  time.  One — "Can  industry 
survive  under  the  short  work-day  and  five-day  week  proposed  by  labor 
radicals?"  Second — "What  would  be  the  economic  effect  of  the  nation- 
alization of  industry?" 

"Ralph  Connor"  to  Speak 

I  have  a  very  interesting  announcement  for  the  Convention.  For  32 
days  the  city  of  Winnipeg,  Manitoba,  was  shut  off  from  Canada  and  the 
rest  of  the  world,  and  in  the  hands  of  the  "Reds."  Anarchists  so  com- 
pletely controlled  the  city  that  the  people  received  no  mail  and  sent  no 
mail;  the  Government  could  not  function  in  Winnipeg;  the  City  Council 


THE  AMERICAN  MINING  CONGRESS  13 

was  removed;  the  Fire  Department  and  the  Police  Department  were  re- 
moved. Unless  one  carried  a  red  card  in  going  to  a  grocery  store  he 
could  not  buy  food,  and  unless  the  housewife  had  a  red  card  at  home  she 
could  not  buy  milk  for  her  babies.  A  committee  known  as  the  Citizens' 
League  very  quietly  eliminated  the  Bolshevists,  or  "Reds,"  or  anarchists, 
or  whatever  they  might  be  called.  Today  they  are  fighting  the  fight  over 
and  Dr.  Halpenny,  the  chairman  of  that  committee  or  league,  who  was 
to  address  this  Convention,  finds  it  impossible  and  dangerous  for  him 
to  leave  the  city.  He  is,  therefore,  sending  the  only  man  available,  who 
happened  to  have  a  special  engagement  in  Pittsburgh,  Rev.  W.  C. 
Gordon,  internationally  known  as  "Ralph  Connor."  Dr.  Connor  was 
preaching  Sunday  in  Pittsburgh,  and  was  sent  on  after  receiving  a 
telegram  from  Dr.  Halpenny  in  Winnipeg.  He  will  reach  us  tomorrow 
afternoon  to  address  this  Convention  tomorrow  night,  and  will  tell  us 
something  of  the  horrors  of  Bolshevik  rule  in  Winnipeg. 

Railroads  on  Business  Basis 

CHAIRMAN  WELLS :  We  are  now  privileged  to  listen  to  an  address, 
entitled  "Putting  Our  Railroads  on  a  Business  Basis,"  by  Mr.  Alba  B. 
Johnson,  president  of  the  Railway  Business  Association. 

(Mr.  Johnson's  address  will  appear  on  page  258.) 

Editor  "Railway  Age"  Discusses  Legislation 

CHAIRMAN  WELLS :  Mr.  Samuel  O.  Dunn,  editor  of  the  "Railway 
Age,"  will  address  us  on  "What  the  Railroad  Executives  Think  of  the 
Legislative  Program." 

MR.  DUNN:  Mr.  President,  Ladies  and  Gentlemen  of  The  American 
Mining  Congress :  Certainly  there  is  no  class  of  shippers  in  this  country 
who  should  be  more  interested  in  the  relation  of  existing  shortage  of  rail- 
way equipment  than  those  engaged  in  the  mining  business.  None  has 
suffered  more  for  want  of  adequate  facilities  within  the  last  few  years. 

(Mr.  Dunn's  address  will  appear  on  page  265.) 

CHAIRMAN  WELLS:     Mr.  Clifford  Thorne,  of  Chicago,  will  address 
us  on  "The  Effect  of  Railway  Rates  on  the  Mining  Industry." 
(Mr.  Thome's  address  will  appear  on  page  278.) 


THIRD  GENERAL  SESSION 
EXPOSITION  HALL,  TUESDAY,  NOVEMBER  18,  10.45  A.  M. 

PRESIDENT  WELLS,  PRESIDING. 

CHAIRMAN  WELLS:  The  Convention  will  please  come  to  order. 
The  secretary  desires  now  to  be  informed  of  the  members  of  the  Reso- 
lutions Committee  selected  by  the  several  delegates  to  this  Convention. 


14  REPORT  OF  PROCEEDINGS 

SECRETARY  CALLBREATH :  Mr.  Chairman,  I  do  not  know  whether 
the  daylight  saving  has  brought  to  our  minds  that  possibly  11  o'clock 
is  the  proper  time  for  the  meeting,  but  I  do  hope  that  after  this  you 
gentlemen  will  try  to  get  to  the  meeting  at  the  proper  time,  because 
the  program  is  quite  full,  and  we  need  a  great  deal  of  time  for  dis- 
cussion. 

Certain  of  the  States  last  evening  failed  to  name  their  members  of 
the  Resolutions  Committee.  I  will  call  the  members  of  those  States  and 
ask  that  the  delegates  selected  be  announced. 

The  Resolutions  Committee 

At  the  conclusion  of  announcements  the  secretary  read  the  following 
list  comprising  the  membership  of  the  Resolutions  Committee: 

Alabama Alfred  A.  Smith 

Alaska  John  A.  Davis 

Arizona   Ira  B.  Jorolman 

Arkansas  Ross  Blake 

California E.  C.  Voorheis 

Colorado  George  L.  Nye 

District  of  Columbia James  T.  Lloyd 

Idaho Ravenel  Macbeth 

Illinois   Col.  Warren  R.  Roberts 

Kansas P.  F.  Walker 

Michigan M.  E.  Richards 

Minnesota Carl  Zapffe 

Nevada   F.  C.  Lincoln 

New  Jersey  John  Roach 

New  Mexico  E.  B.  Laidstone 

New  York Edwin  Ludlow 

Ohio C.  O.  Bartlett 

Oklahoma   S.  L.  Wilkins 

Oregon   R.  M.  Betts 

Pennsylvania   W.  A.  McCutcheon 

South  Dakota Eben  W.  Martin 

Texas   E.  F.  Knotts 

Utah A.  G.  Mackenzie 

Washington    Sidney  Norman 

West  Virginia  John  Laing 

Wisconsin   O.  C.  Irwin 

I  think  that  completes  it.  The  General  Resolutions  Committee  will 
meet  at  1.30  o'clock  in  the  room  next  to  the  Old  Colony  Club  Rooms  in  the 
Planters'  Hotel;  it  is  marked  on  the  door  "Committee  on  Resolutions."  I 
hope  that  all  the  members  of  the  committee  will  meet  promptly  at  1.30 
o'clock  and  proceed  to  elect  a  chairman  and  a  secretary.  If  you  desire,  I 
will  be  glad  to  meet  with  you  and  give  you  some  little  information  as  to 
how  we  would  like  to  have  the  resolutions  handed  in,  in  order  to  avoid 
confusion  in  the  secretary's  office. 


THE  AMERICAN  MINING  CONGRESS  15 

MR.  JAS.  T.  LLOYD:  Mr.  Chairman,  would  it  not  be  well  to  make 
that  at  2  o'clock  instead  of  1.30? 

SECRETARY  CALLBREATH:  There  are  three  other  meetings  at 
2  o'clock;  two  are  in  the  Planters'  Hotel  and  one  in  the  Statler— in  fact, 
there  are  four  other  conferences  at  that  time. 

MR.  MACBETH:  Could  not  the  members  of  this  committee  retire  at 
this  time  and  organize?  You  need  only  one  man  from  every  State  dele- 
gation. 

SECRETARY  CALLBREATH:  That  rests  with  the  committee  itself. 
There  is  no  necessity  for  their  organizing  now,  because  as  yet  no  reso- 
lutions are  available  or  have  been  submitted,  so  there  is  no  necessity 
of  immediate  consideration  of  that  matter.  We  will  change  the  time  of 
meeting  until  2  o'clock,  to  meet  the  suggestion  made.  The  committee 
will  meet  at  2  o'clock  in  the  room  on  the  second  floor  of  the  Planters* 
Hotel,  marked  "Resolutions  Committee." 

Joseph  A.  Holmes  Association 

I  have  a  telegram  .from  Doctor  Day,  which  I  am  sure  you  will  be 
interested  in: 

"/.  F.  Callbreath,  Secretary,  American  Mining  Congress,  Planters' 
Hotel,  St.  Louis: 

"Heartiest  congratulations  on  the  great  meeting  of  The  American  Min- 
ing Congress  now  opening.  I  am  kept  away  because  starting  a  Scotch 
shale  plant,  which  functions  beautifully.  Have  mailed  report  on  Joseph 
A.  Holmes  Safety  Association  for  you  to  read,  stating  that,  although 
collection  of  funds  was  suspended  during  the  war,  the  Association  is  now 
actively  fulfilling  its  purposes  of  promoting  safety  in  all  kinds  of  mining 
by  two  means — first,  recognizing  personal  heroism  of  mining  men; 
second,  awarding  recognition  to  those  who  develop  ideas  of  value  in 
increasing  safety. 

"Under  the  presidency  of  Dr.  Manning,  a  fund  of  over  $10,000  has 
already  been  collected,  and  the  interest  has  allowed  the  bestowing  of  the 
Association's  gold  medal  and  diploma  to  the  following  15  miners  for 
undaunted  heroism: 

"Neal  Brennan  and  William  G.  Mitchell,  who  died  while  attempting 
rescue  of  two  imprisoned  miners  in  the  Anaconda  mine  fire  of  February 
14, 1916,  when  21  men  were  lost.  Granite  J.  Frowen  and  Thomas  Cooney, 
for  heroic  work  in  the  same  mine  fire;  they  led  a  party  that  saved  15 
lives.  Lewis  Meridith  Jones,  who  directed  a  rescue  crew  at  the  Bar- 
racksville  (West  Virginia)  fire,  and  gave  his  life.  Manus  Dugan,  who 
saved  27  men  in  the  mine  disaster  at  Butte,  and  died  trying  to  save  more. 

"John  Miner,  Thomas  Jones,  George  Washington  Keith,  Henry  Clay- 
Turner  and  Adam  B.  Mitchell,  for  work  in  the  Havaco  mine  explosion, 
West  Virginia.  Samuel  Hardy  and  Clyde  Foltz,  who  died  endeavoring- 
to  rescue  six  men  in  Mount  Braddock  fire,  Pennsylvania.  Michael  Soft 
Check,  Frank  Krum  and  August  Klaus,  who  rescued  two  men  in  the 
above  fire  when  they  knew  that  two  rescuers  had  died  attempting  the 
same  rescue.  They  were  taken  out  unconscious,  but  recovered.  Seven 


16  REPORT  OF  PROCEEDINGS 

of  the  heroes  in  the  above  awards  died.    In  the  future  the  awards  will 
be  made  on  as  far-reaching  search  as  the  funds  will  permit. 

"The  Association  publicly  recognizes  one  mining  local  in  West  Vir- 
ginia which  sets  an  example  of  a  contribution  every  month  to  this 
Association. 

"With  hearty  good  wishes  for  the  success  of  the  Congress, 
"Yours  faithfully, 

"DAVID  T.  DAY." 
(Complete  report  will  appear  on  page  293.) 

MR.  LLOYD:  Mr.  Chairman,  as  a  member  of  the  Resolutions  Com- 
mittee, we  have  agreed  that,  if  satisfactory  to  the  Convention,  the  Reso- 
lutions Committee  will  meet  at  3  o'clock  at  the  same  place,  next  to  the 
Old  Colony  Club  Rooms. 

MR.  .A.  A.  SMITH  (Ala.):  Mr.  Chairman,  I  notice  that  Senator 
Voorheis  is  chairman  of  the  War  Minerals  Conference,  which  meets  at 
2  o'clock.  There  seems  to  be  a  conflict  of  -time.  I  want  to  attend  the 
War  Minerals  Conference,  which  meets  at  2  o'clock. 

CHAIRMAN  WELLS :  That  is  an  impossible  situation  to  avoid,  be- 
cause we  have  so  many  of  these  other  conferences  to  hold  that  it  is  im- 
possible to  escape  having  on  some  mornings  and  afternoons  two  meet- 
ings at  the  same  hour.  But  so  far  as  the  work  of  the  Resolutions  Com- 
mittee is  concerned  this  afternoon,  I  think  it  is  nothing  more  than 
organizing,  and  I  think  that  is  the  reason  that  some  of  the  members 
have  suggested  that  the  first  meeting  be  held  at  3  o'clock,  so  that  you 
can  attend  the  beginning  of  the  War  Minerals  meeting  and  the  Gold 
Conference.  If  there  is  no  further  objection,  the  first  meeting  of  the 
Resolutions  Committee  will  be  at  3  o'clock  in  Parlor  "A,"  adjoining  the 
Old  Colony  Club,  at  the  Planters'  Hotel. 

The  Anthracite  Industry 

We  are  now  privileged  to  listen  to  an  address  by  Mr.  E.  W.  Parker, 
director  of  the  Anthracite  Bureau  of  Information,  of  Philadelphia,  Pa. 
[Applause.] 

(Mr.  Parker's  address,  "Labor  Conciliation  in  the  Anthracite  Industry," 
will  appear  on  page  309.) 

Director  U.  S.  Geological  Survey 

CHAIRMAN  WELLS :  Dr.  George  Otis  Smith,  director  of  the  United 
States  Geological  Survey,  will  now  address  us  on  "Our  Industries'  Part." 

(Dr.  Smith's  address  will  appear  on  page  317.) 

Dr.  Smith  concluded  with  the  remark:  If  I  were  allowed  only  10 
words  before  this  audience,  these  would  be  the  10  words : 

"A  30-hour  week  is  the  ailment,  not  the  cure." 

Now,  gentlemen,  having  preached  my  sermon,  I  will  give  out  my  text: 
"Exodus  20,  Chapter  20,  Verse  9 — American  version:  "Six  days  shalt 
thou  labor  and  do  all  thy  work."  [Applause.] 


THE  AMERICAN  MINING  CONGRESS  17 

CHAIRMAN  WELLS:  You  will  readily  appreciate  the  causes  which 
have  detained  Senator  Poindexter  in  Washington  and  made  it  impossible 
for  him  to  speak  to  you  today,  as  indicated  on  the  program.  He,  how- 
ever, advises  us  that  he  quite  confidently  expects  to  be  with  us  the  latter 
part  of  the  week,  when,  of  course,  a  place  will  be  made  for  him  in  the 
regular  program. 

I  am  asked  by  the  St.  Louis  Committee  on  Arrangements  for  this  Con- 
vention and  its  attendant  functions  to  remind  you  all  of  the  necessity 
of  furnishing  information  at  our  secretary's  office,  at  the  Planters'  Hotel, 
in  regard  to  the  number  who  will  attend  the  dinner  on  Wednesday. 
And  that  you  will  also  cause  information  to  be  conveyed  in  regard  to 
the  number  of  ladies  who  will  attend  the  ladies'  dinner  and  reception 
at  the  Hotel  Statler  on  Wednesday  at  6  o'clock.  This  is  a  mere  kind- 
ness and  courtesy  to  our  hosts,  who  undertake  to  arrange  these  matters 
for  us.  We  must  advise  them  in  due  season  in  order  that  they  may 
properly  prepare. 

Under  the  rules  of  this  Convention,  all  resolutions  must  be  in  writing, 
presented  to  the  Convention  by  the  secretary,  and  referred  to  the  Com- 
mittee on  Resolutions  without  debate. 

The  purpose  in  having  resolutions  so  offered  and  read  to  the  Con- 
vention is  to  enable  all  delegates  to  be  advised  of  the  character  of  reso- 
lutions that  have  been  offered  and  that  are  to  receive  the  consideration 
of  the  Resolutions  Committee.  The  proper  place  to  debate  those  resolu- 
tions is  at  the  outset,  at  least,  before  the  Resolutions  Committee.  Oppor- 
tunity for  such  discussion  and  debate  will  be  furnished  at  the  pleasure 
of  the  chairman  of  the  Resolutions  Committee,  upon  application  at  any 
time  the  Committee  is  in  session.  There  is  no  discussion  of  resolu- 
tions at  the  time  they  are  introduced  at  these  sessions  of  the  Con- 
vention. They  will  be  discussed  and  debated  after  such  resolutions  have 
been  favorably  passed  upon  by  the  Resolutions  Committee  and  offered 
here  in  its  report.  The  secretary  will  read  such  resolutions  as  have 
been  offered. 

Murder  of  Americans  in  Mexico 

Secretary  Callbreath  read  the  following  resolutions: 

WHEREAS,  On  repeated  invitations  of  the  Mexican  Government, 
prior  to  1910  and  since,  American  mining  engineers,  operatives 
and  employes  in  large  numbers  have  joined  in  the  industrial  de- 
velopment of  Mexico,  to  the  great  benefit  of  the  Mexican  people 
generally,  pursuing  their  profession  in  lawful  and  orderly  man- 
ner, with  full  regard  for  the  rights  of  the  Mexican  people  and 
for  their  obligations  as  American  citizens  to  their  own  Govern- 
ment; and 

WHEREAS,  During  recent  years  of  revolution  and  disorder  these 
Americans,  citizens  in  the  peaceful  pursuit  of  their  profession, 
and  in  the  guardianship  of  properties  intrusted  in  their  care, 
have  suffered  great  losses  and  personal  indignities  and  injuries ; 
and 

WHEREAS,  Forty-five  of  these  Americans,  citizens  so  engaged 
and  so  persecuted,  were  known  to  have  suffered  the  extreme 
penalty  of  death  at  the  hands  of  the  Mexican  nationals;  and 


18  REPORT  OF  PROCEEDINGS 

WHEREAS,  On  January  10,  1916,  nearly  three  months  after  the 
Government  of  the  United  States  had  recognized  as  responsible 
and  de  facto  the  existing  Government  of  Mexico,  18  American 
members  of  the  mining  engineering  profession,  returning  to 
Mexico  on  the  express  invitation  of  the  Mexican  Government 
and  under  assurance  of  full  protection  from  rebellious  or  dis- 
orderly sources,  were  expressly  denied  military  escort  through  a 
section  known  by  the  Mexican  Government  to  be  overrun  by  a 
rebellious  faction,  and  were  set  upon  and  ruthlessly  murdered 
at  Santa  Isabel,  Chihuahua,  by  Mexican  rebels;  and 

WHEREAS,  In  none  of  the  above  cited  cases  have  the  murderers 
of  these  Americans  been  avenged,  nor  apparently  has  serious 
effort  been  made  to  punish  the  perpetrators  thereof;  and 

WHEREAS,  No  steps  so  far  taken  by  the  Government  of  the 
United  States  have  been  provided  the  constitutional  protection 
which  all  law-abiding  American  citizens  of  right  expect;  there- 
fore, be  it 

Resolved,  That  The  American  Mining  Congress,  assembled  in 
annual  convention  at  St.  Louis,  Missouri,  hereby  protests  to  the 
Department  of  State  of  the  United  States  against  further  dis- 
regard by  the  American  Government  of  conditions  in  Mexico 
that  make  it  unsafe  for  American  mining  engineers,  operatives 
and  employes  to  go  there  in  the  practice  of  their  profession  and 
for  the  care  of  business  interests  to  them;  and  be  it  further 

Resolved,  That  we  recommend  that  the  Government  of  the 
United  States  immediately  take  such  steps  as  will  insure  that 
the  constitutional  rights  of  American  citizens  shall  protect 
them  on  our  borders  and  go  with  them  throughout  the  world, 
and  that  every  American  residing  or  having  property  in  any 
foreign  country  shall  receive  the  full  protection  of  the  United 
States  Government  both  for  himself  and  for  his  property;  and 
be  it  further 

Resolved,  That  a  copy  of  these  resolutions,  together  with  the 
names,  in  so  far  as  obtainable,  of  the  45  American  mining  men 
who  are  known  to  have  been  murdered  in  Mexico  since  1910,  and 
the  circumstances,  so  far  as  obtainable,  surrounding  these  mur- 
ders, be  forwarded  to  the  President  of  the  United  States,  and 
to  the  Secretary  of  State,  and  to  the  Congress  of  the  United 
States,  through  the  Vice-President  and  the  Speaker  of  the  House 
of  Representatives. 

CHAIRMAN  WELLS :  You  have  heard  the  resolution  which  has  been 
referred  to  the  Resolutions  Committee. 

SEftOR  E.  E.  MARTINEZ  (Delegate  Representing  Mexico)  :  I  am 
the  accredited  representative  of  the  Mexican  Government,  and  I  would 
beg  of  you  to  give  me  a  chance  to  put  forth  our  side  of  the  question. 

CHAIRMAN  WELLS:  I  meant  to  say  to  you  that  opportunity  to 
discuss  this  resolution  will  be  open  to  you  or  anyone.  Debate  on  the 
resolution  itself  in  this  Convention  will  be  held  only  after  the  resolution 
has  been  passed  by  the  Resolutions  Committee.  At  this  time  we  have 
no  discussion  of  these  resolutions.  We  will  read  the  resolutions  that  are 
going  to  the  Resolutions  Committee,  so  if  anyone  desires  to  be  heard  he 
has  due  information  that  it  is  going  to  the  Resolutions  Committee.  I 
feel  that  I  am  doing  no  more  than  voicing  the  feelings  of  the  members, 
that  you  will  have  every  opportunity  to  be  heard. 


THE  AMERICAN  MINING  CONGRESS  19 

SECRETARY  CALLBREATH :  It  seems  to  me  that  on  a  matter  of  so 
great  importance,  on  which  the  whole  Convention  desires  complete  infor- 
mation, that  the  gentleman  ought  to  have  an  opportunity  to  speak  before 
this  whole  body  concerning  his  views.  I  want  to  make  a  special  request, 
or  a  motion,  that  Senor  Martinez  be  given  time  at  the  evening  session 
to  say  what  he  has  to  say  on  the  subject. 

(Motion  duly  seconded  by  Mr.  Bartlett.) 

MR.  SEAMAN:  In  giving  the  gentleman  time  to  present  his  side 
of  the  case,  I  think  others  should  be  given  time  to  present  their  side,  so 
that  the  Convention  may  have  both  sides. 

MR.  McCUTCHEON:  Do  I  understand  that  this  is  to  be  presented 
to  the  Resolutions  Committee  and  the  matter  debated  upon  whether  the 
Resolutions  Committee  gives  its  approval  or  not?  I  do  not  think  this 
Convention  should  take  up  its  time  in  discussing  a  question  until  after 
it  has  been  discussed  by  the  Resolutions  Committee. 

CHAIRMAN  WELLS :  It  always  happens  that  a  number  of  resolutions 
are  offered  of  a  character  not  to  commend  themselves  to  the  Resolutions 
Committee. 

MR.  McCUTCHEON :     I  think  the  motion  is  not  in  order. 
CHAIRMAN  WELLS :    I  think  you  can  suspend  the  rules,  if  you  desire 
to  do  so,  by  proper  vote. 

Objection  to  Discussion 

MR.  MACBETH:  Mr.  Chairman,  if  you  inaugurate  proceedings  of 
this  character  on  this  subject,  you  will  find  that  similar  requests  will  be 
made  on  other  subjects,  and  you  will  never  know  where  to  stop.  I  would 
suggest  that  if  it  goes  through  and  is  adopted  by  The  American  Mining 
Congress,  when  the  proper  time  comes  they  can  present  their  views. 

CHAIRMAN  WELLS:  As  I  understand  the  motion,  it  is  that  the 
rule  with  respect  to  discussion  or  debate  on  resolutions  be  suspended 
in  this  instance,  to  the  extent  of  permitting  Senor  Martinez  to  address  the 
Convention  this  evening  at  8  o'clock.  That  motion  has  been  duly  made 
and  seconded. 

MR.  LLOYD:  Mr.  chairman,  I  make  a  point  of  order.  That  motion 
is  not  in  order  under  the  rules. 

SECRETARY  CALLBREATH:  I  did  not  intend  exactly  to  make  a 
motion;  I  intended  that  the  Convention  should  invite  Senor  Martinez  to 
present  his  views  this  evening,  but  it  seems  to  me,  under  the  circum- 
stances— and  I  think  the  gentlemen  are  right  on  their  points  of  order — 
that  I  had  better,  with  the  consent  of  my  second,  withdraw  my  motion 
from  the  House,  with  the  understanding  that,  if  this  resolution  is  pre- 
sented by  the  Resolutions  Committee,  the  gentleman  then  be  given  an 
opportunity  to  be  heard.  [Applause.] 

(Mr.  Bartlett,  who  seconded  the  motion,  consented  to  withdraw  his 
second.) 

(Secretary  Callbreath  read  other  resolutions.) 


20  REPORT  OF  PROCEEDINGS 

Telegram  from  President  National  Coal  Association 

SECRETARY  CALLBREATH:  We  have  a  telegram,  just  received, 
from  Mr.  H.  N.  Taylor,  president  of  the  National  Coal  Association,  wha 
was  expected  to  have  been  present  at  the  meeting  today.  The  telegram 
is  of  considerable  interest,  and  I  will  read  it  to  the  Convention. 

WASHINGTON,  D.  C.,  Nov.  17,  1920. 
American  Mining  Congress,  St.  Louis,  Mo. : 

Greatly  regret  my  inability  to  attend  conference  of  The  Amer- 
ican Mining  Congress,  coming  just  at  this  time,  when  the 
industrial  welfare  of  the  nation  is  face  to  face  with  the  coal 
crisis.  I  trust  your  organization  will  go  strongly  on  record  in 
the  interest  of  right  and  justice.  The  wage  scale  matters  here 
are  of  such  important  nature  that  many  of  the  operators  of  the 
country  will  be  unable  to  attend,  but  they  join  me  in  sending 
regrets.  My  address,  which  I  would  have  given  personally,  is 
herewith  transmitted  to  you  for  reading  before  the  Convention. 

Can't  Fool  All  the  People 

Abraham  Lincoln  once  said :  "You  can  fool  part  of  the  people 
all  of  the  time ;  all  of  the  people  part  of  the  time ;  but  you  cannot 
fool  all  of  the  people  all  of  the  time."  The  United  Mine  Workers 
have  been  fooling  all  of  the  people  for  a  long  time.  Certainly, 
when  we  are  threatened  with  starvation  by  a  coal  strike  at  this 
time  of  the  year,  under  the  existing  conditions,  it  is  time  for 
the  intelligent  public  to  wake  up  and  take  necessary  steps  to 
protect  the  best  interests  of  all  the  people. 

Mine  Workers'  Demands  Increase  Price 

The  history  of  the  United  Mine  Workers,  from  their  inception 
up  to  the  present  time,  shows  that  at  every  conference  they  have 
always  gained  part  of  their  demands  on  working  conditions, 
the  objective  being  to  increase  the  cost  of  coal,  even  if  they  did 
not  each  time  obtain  an  increase  in  wages.  Union  method  in 
the  United  States  has  drifted  from  honest  effort  at  collective 
bargaining  at  its  inception  to  an  organized  labor  autocracy  that 
has  placed  a  premium  on  inefficiency. 

Conservatives  Fear  Radicals 

The  radicals  ride  over  the  conservatives,  and  the  miners  of 
today  are  autocratically  governed,  through  fear,  by  their  radical 
officials  and  business  agents.  The  check-off  system  means  an 
absolutely  closed  shop,  the  conservative  miner  being  forced  to 
contribute  excessive  dues  at  the  dictation  of  the  radical  officials, 
and  to  pay  fines  if  he  offers  resistance  to  their  orders,  no  matter 
how  unreasonable  they  may  be,  thus  placing  ample  funds  in  the 
hands  of  the  radical  officials  of  the  United  Mine  Workers  in 
demanding  an  increase  of  60  per  cent,  on  the  present  8-hour 
scale,  and  then  proposing  to  work  only  a  6-hour  day  for  five 
days  a  week  for  this  increased  daily  rate.  Six  hours,  bank  to 
bank,  means  about  five  hours'  actual  work.  No  double  shifts  to 
be  allowed,  with  time  and  a  half  for  overtime  and  double  time 
for  holidays  and  Sundays.  Their  proposition  makes  Saturday 
a  holiday  or  double  time. 

Example  of  Demands 

An  example  of  this  demand  is  as  follows :  The  price  now  being 
paid  for  common  underground  labor,  such  as  driving  a  mule 


THE  AMERICAN  MINING  CONGRESS  21 

and  shoveling  rock,  is  $5  for  eight  hours'  work,  or  62^  cents 
per  hour.  This,  plus  60  per  cent.,  would  make  $8  for  the  6-hour 
day,  of  five  hours'  actual  work,  or  $1.60  per  hour,  or  156  per  cent, 
advance.  For  work  on  a  Saturday  or  holiday  it  would  be  double 
time,  or  $16  per  day,  or  $3.20  per  hour  for  the  actual  hours 
worked,  or  an  advance  of  412  per  cent. 

Soviet  Doctrine  Introduced 

The  radical  officials  well  know  that  considerable  work  cannot 
be  done  with  the  mines  in  operation,  forcing  the  operator  to  pay 
double  time  or  operate  only  four  days  to  avoid  the  tribute  which 
is  in  line  with  this  object  to  reduce  production  as  part  of  their 
Soviet  doctrine.  We  can  never  remedy  the  high  cost  of  living 
so  long  as  there  is  a  continued  effort  to  increase  wages  and 
decrease  production  from  every  direction.  Naturally,  an  in- 
crease in  wages  with  decreased  production  must  mean  an  increase 
in  the  cost  of  every  product. 

In  the  past,  many  good  people  have  felt  and  thought  that  the 
Lord,  in  His  goodness  and  mercy,  put  coal  in  the  ground,  and  all 
that  was  necessary  was  to  take  it  out  and  count  their  money. 
Statesmen,  both  state  and  national,  have  been  intimidated  by 
radical  officials  of  the  United  Mine  Workers,  from  a  free  position 
in  legislating  for  all  the  people  under  the  erroneous  impression 
that  such  leaders  controlled  the  political  vote  of  the  miners.  A 
reflection  on  the  intelligence  of  the  American  miner,  for  the  great 
majority  of  foreigners  in  the  mines  are  not  citizens  and  voters 
who  do  not  know  what  they  are  striking  for;  the  largest  per- 
centage of  them  do  not  understand  English,  and  do  not  care  to 
learn,  as  they  come  to  this  country  to  make  money,  and  in  a  few- 
years  go  back  to  "homeland"  to  live  in  comfort  on  their  Ameri- 
can savings.  Millions  of  dollars  yearly  are  sent  to  foreign  coun- 
tries by  these  foreign  miners. 

"Honest-to-God"   Americans 

We  do  not  want  Americans  with  a  foreign  handle  tacked  on  to 
their  Americanism.  It  is  time  for  the  people  to  stand  up  for  the 
"Honest-to-God"  American.  Our  nation  was  built  on  the  solid 
foundation  of  honesty,  equality,  and  justice,  and  equal  oppor- 
tunity for  all,  and  we  cannot  allow  class  legislation,  Bolshevism, 
anarchy,  or  radical  union  leaders,  running  amuck,  to  undermine 
the  solid  foundation  our  forefathers  built.  Radicalism  on  the 
part  of  labor  or  capital  cannot  be  allowed  to  rule  the  country 
or  be  allowed  to  possess  the  power  to  oppress  all  the  people. 

Force  Public  Tribute 

The  organized  miners'  strike  is  an  attempt  to  force  a  huge 
tribute  from  American  people  on  the  cost  of  their  fuel,  and  mak- 
ing an  attempt  in  winter  is  their  strategy  to  stop  the  wheels 
of  industry  and  transportation,  and  force  submission  of  the 
defenseless  public  through  hunger  and  cold,  and  the  sufferings 
of  women  and  children  will  arouse  no  sympathy  in  the  heartless 
Juggernaut  of  radical  unionism. 

The  miner  in  the  United  States  today  is  the  highest  paid 
laborer  in  the  world,  of  its  class,  and  his  demands  now  made, 
more  than  doubling  the  cost  of  fuel,  are  unreasonable  and  more 
than  a  suffering  public  can  endure. 

[Applause.]  (Signed)     HARRY  N.  TAYLOR. 

(Assistant   Secretary  Burns  made  a  number  of  program   announce- 
ments.) 


22  REPORT  OF  PROCEEDINGS 

CHAIRMAN  WELLS:  You  will  naturally  employ  your  time  this 
afternoon  as  your  special  interests  may  suggest,  but  let  me  urge  you, 
in  all  sincerity,  at  least  to  attend  one  or  two  of  these  special  meetings 
and  conferences.  We  need  you;  those  who  are  conducting  these  special 
conferences  and  discussions  need  your  aid,  suggestions  and  criticisms,  if 
we  are  to  do  effective  work  and  get  it  done  within  the  limited  time  we 
have.  If  you  will  take  the  afternoon — because  it  does  not  happen  to  be 
a  formal  session  as  a  whole — for  recreation  about  the  city,  you  do  us  and 
yourselves  some  injury,  because  we  are  here  to  do  serious  work,  if  you 
will  help  us  to  do  serious  work,  and  we  want  your  criticism  as  much 
as  anything  else. 

The  General  Convention  will  now  stand  adjourned  until  8  o'clock  this 
evening,  in  this  hall. 


FOURTH  GENERAL  SESSION 
EXPOSITION  HALL,  TUESDAY,  NOVEMBER  18,  8  P.  M. 

The  meeting  convened  in  Exposition  Hall  at  8  P.  M.,  Mr.  Geo.  M. 
Taylor,  president  of  the  Colorado  Metal  Mining  Association,  presiding. 

CHAIRMAN  TAYLOR :  The  meeting  will  please  come  to  order.  There 
will  be  some  resolutions  read,  and,  without  debate,  will  be  referred  to 
the  Committee  on  Resolutions.  The  secretary  will  read  those  resolutions. 

SECRETARY  CALLBREATH:  May  I  make  a  few  announcements? 
The  Resolutions  Committee  of  the  Gold  Conference  will  meet  at  the 
Statler  Hotel  tomorrow  morning  at  10.30  o'clock,  and  will  be  glad  to 
hear  any  resolutions  you  may  have  to  offer. 

(Secretary  Callbreath  read  resolutions.) 

CHAIRMAN  TAYLOR:  These  resolutions  will  go  to  the  Resolutions 
Committee  without  debate. 

We  will  have  a  report  of  the  Committee  on  Standardization  of  Min- 
ing Equipment  by  Colonel  Roberts. 

(Report  will  appear  on  page  326.) 

The  Russian   Radical 

CHAIRMAN  TAYLOR:  The  next  thing  on  our  program  will  be  an 
address  on  "The  Russian  Radical  As  I  Found  Him"  by  Mr.  George  W. 
Simmons,  of  this  city.  Mr.  Simmons,  for  two  years,  was  the  regional 
director  for  the  Red  Cross  in  Southwestern  Siberia,  and  he  is  going  to 
tell  you  about  the  Russian  as  he  found  him  over  there  at  that  time.  I 
have  the  honor  to  introduce  Mr.  Simmons.  [Applause.] 

(Mr.  Simmons'  address  will  appear  on  page  343.) 

The  Ruling  Passion 

CHAIRMAN  TAYLOR:  Mr.  Allen  Walker,  manager  of  Foreign  De- 
partment of  the  Guaranty  Trust  Company,  of  New  York  City,  has 


THE  AMERICAN  MINING  CONGRESS  23 

traveled  here  to  speak  to  us  this  evening,  and  will  talk  to  you  on  the 
subject  "What  is  the  Matter  with  America?" 

MR.  WALKER:  I  did  not  know  when  I  left  New  York  that  Mr. 
Simmons  was  going  to  address  you  this  evening  on  the  subject  which 
he  has  just  covered.  It  seems  to  me  rather  odd  that  our  subjects  should 
be  so  closely  related.  I  am  not  going  to  try  to  impose  upon  you 
another  address  on  Bolshevism  or  radicalism,  but  I  am  going  to  ask  you 
to  join  with  me  for  a  moment  in  analyzing  some  of  the  conditions  which 
now  exist,  to  see  if  you  agree  with  me  in  our  effort  to  discover  "What  is 
the  Matter  with  America?" 

(Mr.  Walker's  address  will  appear  on  page  351.) 

CHAIRMAN  TAYLOR:  After  the  talk  on  Bolshevism  in  Russia  by 
Mr.  Simmons,  and  Mr.  Walker's  talk  on  our  troubles  in  America,  I  do 
not  think  we  could  have  anything  more  fitting  for  the  balance  of  the 
evening  than  the  talk  we  are  to  have  from,  may  I  say,  Ralph  Connor, 
whom  you  all  know,  instead  of  the  Rev.  Charles  W.  Gordon.  I  do  not 
think  there  is  anyone  within  the  sound  of  my  voice  who  has  not  read  at 
least  one  of  his  books,  and  I  know  you  sat  up  late  to  finish  it. 

Winnipeg   Soviet   Movement 

We  are  to  be  doubly  honored  by  Dr.  Gordon.  He  has  consented  to  stay 
over  tomorrow  night  and  to  speak  to  you  at  the  dinner  tomorrow  eve- 
ning on  industrial  conditions  in  England,  from  where  he  has  just  recently 
returned,  and  is  familiar  with  their  labor  troubles  over  there.  Dr. 
Gordon  is  the  pastor  of  a  church  in  Winnipeg.  I  think  last  May  it  was 
that  we  all  read  in  the  newspapers  the  labor  troubles  they  were  having 
up  there  which  continued  through  several  weeks,  and  I  think  for  a  short 
period  the  "Reds"  took  over  the  town  and  ran  it  for  the  good  citizens. 
Dr.  Gordon  is  going  to  speak  to  us  tonight  on  that  subject — "The  Red 
Menace."  I  have  the  honor  to  introduce  Dr.  Gordon  to  you. 

Dr.  Gordon's  address  will  appear  on  page  365.) 

CHAIRMAN  TAYLOR :     The  secretary  has  an  announcement  to  make. 

(Assistant  Secretary  Burns  announced  a  number  of  very  important 
changes  in  the  program.) 


INFORMAL  DINNER  TO  DELEGATES 
PLANTERS'  HOTEL,  WEDNESDAY  EVENING,  NOVEMBER  19 

The  most  delightful  event  of  the  Convention  week  was  the  informal 
dinner  given  to  delegates  in  the  capacious  dining  room  of  the  Planters' 
Hotel  on  Wednesday  evening.  The  affair  was  under  the  direction  of  the 
St.  Louis  Entertainment  Committee,  a  sub-committee  of  the  general  com- 
mittee, and  the  details  were  most  complete.  Several  hundred  delegates 
and  a  fair  sprinkling  of  St.  Louis  business  men,  acting  as  hosts,  filled 
the  dining  room  of  the  Planters'  Hotel,  famed  for  its  hospitality. 


24  REPORT  OF  PROCEEDINGS 

The  Entertainment  Committee  had  prepared  several  good  musical  num- 
bers and  surprises,  and  many  of  the  delegates  are  still  looking  for  the 
appearance  of  the  "moving  picture"  in  which  they  participated. 

The  chairman  and  toastmaster  was  Capt.  Robert  E.  Lee,  of  St.  Louis, 
a  polished  raconteur,  whose  delightful  handling  of  the  occasion  will  long 
be  pleasantly  remembered  by  those  fortunate  enough  to  be  present.  A 
stenographic  report  of  the  evening's  program  is  inadequate  to  describe 
the  atmosphere  of  the  premier  event  of  the  Twenty-second  Annual  Con- 
vention. 

After  the  guests  had  been  "filmed"  and  dinner  served,  Toastmaster  Lee 
said: 

Gentlemen  of  The  American  Mining  Congress,  Gentlemen  of  St.  Louis, 
Our  Distinguished  Guests  at  the  Head  Table :  This  is  the  first  time  that 
St.  Louis  has  ever  had  The  American  Mining  Congress.  We  have  looked 
you  over,  you  know,  much  in  the  attitude  of  the  Irishman  who  was 
arrested  for  beating  up  a  fellow.  The  policeman  pulled  him  up  and 
said:  "What  in  the  world  are  you  beating  that  man  for?"  He  said: 
"The  dirty,  low-down  scoundrel,  he  called  me  a  rhinoceros  four  years 
ago."  The  policeman  said:  "Well,  what  are  you  beating  him  up  for 
now?"  The  Irishman  replied:  "I  never  saw  a  rhinoceros  before." 
[Laughter.]  We  have  never  seen  The  American  Mining  Congress  before, 
but  we  have  seen  you,  and  we  know  you  are  all  right. 

Down  in  the  Southland — and  nearly  everybody  in  St.  Louis  was  born 
in  the  South,  or  his  grandfather  was — they  have  a  saying  when  they 
want  to  compliment  a  man  that  "he  is  our  kind  of  folks,"  and  we  have 
come  to  the  conclusion  here  in  St.  Louis  that  you  are  "our  kind  of  folks." 
I  think  that  is  worth  applause.  [Laughter  and  Applause.]  We  have 
the  Southern  Hotel  in  perpetuity  and  the  Planters'  Hotel  in  perpetuity 
for  your  use  each  year  hereafter.  Your  president,  on  my  left,  says  he 
votes  for  it.  All  who  are  in  favor  of  it  will  please  signify  by  saying, 
"Aye."  [Cries  of  "Aye!"]  I  thank  you.  [Laughter.] 

Spirit  of  Fellowship 

St.  Louis  feels  toward  you,  gentlemen,  like  this  other  story  they  tell 
about  the  old  fellow  who  was  lying  on  the  curb  in  front  of  the  St.  Louis 
Club,  to  which  Governor  Gardner  belongs — but  this  story  is  not  on  Gov- 
ernor Gardner.  The  rain  was  falling  and  he  was  lying  there  with  the 
water  flowing  under  his  right  ear,  and  he  saw  two  distinguished  gentle- 
men coming  out  of  the  Club.  He  said:  "Gentlemen  (hie),  won't  you 
please  be  so  (hie)  kind  as  to  help  a  poor  (hie)  fellow  get  upon  his  (hie) 
feet?"  And  one  of  the  gentlemen  said:  "Old  top,  I'd  like  to  do  it  (hie) 
the  best  in  the  (hie)  world,  but  at  this  moment  its  (hie)  physically 
impossible.  But  to  show  you  (hie)  my  heart's  in  the  (hie)  right  place,  I'm 
going  to  come  and  (hie)  lay  down  with  you."  [Laughter  and  applause.] 

We  started  out  to  get  this  Convention  in  St.  Louis  a  long  time  ago. 
This  little  shrimp  on  the  right  (who  runs  the  Convention  Bureau  in  St. 
Louis),  Hatfield — the  only  description  I  can  think  of  for  him  is  the  one 
that  Mr.  Roosevelt  brought  home  from  Africa,  the  "sittzy  fly" — so  Hat- 


THE  AMERICAN  MINING  CONGRESS  25 

field  brought  your  Convention  here  mostly  by  hook,  it  might  have  been 
by  crook,  and  here  you  are.  Now,  our  attitude  toward  you  is  this: 

A  negro  soldier  was  down  here  at  Little  Rock;  he  came  walking  down 
toward  the  sentry,  and  the  sentry  said:  "Halt,  where  are  you  going?" 
He  said:  "I'm  going  into  Little  Rock."  The  sentry  said:  "Where  is 
your  pass?"  He  said:  "I  ain't  got  no  pass."  He  said:  "Then  you  ain't 
going  to  Little  Rock."  He  said:  "Oh,  yes,  I  is!"  He  said:  "Look  here, 
boy,  you  ain't  going  no  place  unless  you  go  on  the  other  side  of  this 
gun."  So  the  other  negro  got  out  his  razor,  rubbed  it  up  and  down, 
and  said:  "Listen  to  me,  boy,  listen  to  me.  I  got  a  mother  in  Heaven, 
a  father  in  Hades,  and  a  girl  in  Little  Rock,  and  I'm  going  to  see  one 
of  them  tonight"  [Laughter.]  We  had  to  have  you,  if  we  had  to  pull 
a  razor  on  you  to  get  you. 

Now  that  you  are  here,  we  hope  that  you  have  been  at  least  nor- 
mally happy  in  the  St.  Louis  way.  The  St.  Louis  way  of  being  happy 
is  just  simply  jubilantly  so  all  the  time,  that  is  our  normal  condition.  We 
never  get  down  to  serious  things  unless  there  is  a  strike  in  the  Illinois 
coal  mines;  then  we  shiver  all  the  harder. 

I  want  you  gentlemen  to  get  out  of  the  attitude  that  I  have  found  in 
a  little  piece  of  poetry  here.  Don't  get  into  this.  I  note  so  many  gentle- 
men about  me  with  silvered  hair,  like  my  own,  who  seem  to  have  the 
cares  of  the  nation  on  them.  I  want  you  to  listen  to  this  and  bear  in 
mind  the  rest  of  the  evening  what  may  be  coming  to  you. 

King  David  and  King  Solomon  led  joyous,  happy  lives, 

Surrounded  by  luxuries,  and  ladies,  friends  and  wives ; 

But  when  old  age  came  creeping  on,  compelled  by  conscience  qualms, 

King  Solomon  wrote  the  Proverbs  and  King  David  wrote  the  Psalms. 

[Applause.] 

Telegrams  of  Regret 

There  are  some  telegrams  here  which  this  other  "sittzy  fly"  Burns  has 
asked  me  to  read  to  you  gentlemen.  With  your  permission,  I  do  it. 

Please  convey  congratulations  to  The  American  Mining  Con- 
gress on  the  discussion  and  action  before  the  Congress,  and  my 
best  wishes  for  continued  success  of  your  meeting.  I  very  greatly 
regret  that  I  cannot  be  with  you  Friday,  as  suggested.  The 
stand  of  your  Congress  on  sound  American  policies  will  be  appre- 
ciated by  the  country. 

FRANK  W.  MONDELL. 
[Applause.] 

Thank  you  for  your  kind  invitation  to  address  the  Congress, 
but  important  official  duties,  including  the  coal  strike,  prevent 
my  absence  from  the  office  at  this  time.  Best  wishes  for  a 
pleasant  and  profitable  Convention. 

J.  B.  A.  ROBERTSON, 
[Applause.]  Governor  of  Oklahoma. 

Votes  yesterday  and  today  on  the  treaty  and  delay  in  final  vote 
unfortunately  make  it  impossible  for  me  to  reach  St.  Louis  before 
adjournment  of  the  Mining  Congress.  I  regret  this  very  much, 


26  REPORT  OF  PROCEEDINGS 

as  I  looked  forward  to  participating  in  this  gathering  of  business 
leaders.  Upon  such  men  as  these,  composing  this  Congress, 
largely  rests  the  responsibility  of  preserving  Americanism  and 
combating  the  international  communistic  movement.  Open  revo- 
lution is  freely  preached  and  backed  by  ample  funds.  Surrender 
of  American  independence  to  European  control  is  officially  advo- 
cated. Strong  measures  are  necessary  to  bring  us  back  to  the 
great  principles  upon  which  our  prosperity  is  founded. 

Protection  of  American  citizens  in  Mexico  and  elsewhere  should 
be  demanded.  The  right  to  work  either  in  or  out  of  a  labor 
union  and  the  security  of  private  property  should  be  guaranteed 
by  the  full  power  of  the  Government.  These  principles  lie  at  the 
foundation  of  our  institutions.  I  feel  the  influence  of  The  Amer- 
ican Mining  Congress  will  be  exerted  in  their  support. 

MILES  POINDEXTER. 
[Applause.] 

When  I  think  of  this  League  of  Nations'  vote  in  Congress  and  all  the 
row  we  have  been  having  for  some  time,  it  makes  me  think  of  the  story 
of  the  two  Hebrews  who  met  on  Yom  Kippur,  their  New  Year  Day. 
Silverstein  said:  "Well,  Epstein,  it  is  Yom  Kippur;  you  know  how 
we  feel — forgive  and  forget  on  this  day.  What  do  you  say?"  Epstein 
said:  "Veil,  if  you  feel  that  way,  I  don't  mind.  You  have  done  some 
things,  but  I  will  forgive  and  forget.  I  wish  you  everything  today  that 
you  wish  me."  Silverstein  said :  "There  you  go  again,  starting  it  all 
over."  [Laughter.] 

Gentlemen,  I  am  about  to  introduce  to  you  the  gentleman  who  presides 
over  the  destiny  of  the  State  of  Missouri.  Somebody  was  mean  enough 
at  a  recent  banquet  to  say  of  him  that  "he  is  the  best  Governor  that 
Missouri  has."  [Laughter.]  Well,  now,  I  will  go  farther,  as  we  are 
both  Democrats,  he  and  I,  and  I  will  say  that  "he  is  the  best  Governor 
that  Missouri  has  had."  [Applause.] 

The  Governor  is  a  man  who,  too,  has  gone  through  the  trials  and 
tribulations  and  troubles  of  strikes  and  labor  difficulties.  He  also,  like 
you,  has  made  money,  and  he  is  in  thorough  sympathy  with  you;  he 
also,  I  am  told,  is  a  profiteer,  like  you.  So  the  Governor  of  the  fourth 
State  in  the  Union,  the  best  State  that  I  have  ever  lived  in — and  I  was 
born  in  Kentucky  [laughter] — is  Governor  Frederick  D.  Gardner,  of 
Missouri. 

(Rising  greeting  extended  to  Governor  Gardner.) 

(The  Governor's  address  will  appear  on  page  374.) 

A  Truthful  Man 

TOASTMASTER  LEE:  Gentlemen,  like  you,  I  have  listened  to  the 
silvery  words  of  our  Governor.  I  do  not  think  there  has  been  any  doubt 
in  your  minds  about  anything  he  has  said,  except  his  fulsome  praises 
of  Missouri,  ,and  I  do  not  want  you  to  take  them  in  the  wrong  light.  The 
Governor  is  an  absolutely  truthful  man.  The  story  that  occurs  to  me, 
illustrating  this,  is  of  the  Hebrew  who  came  up  to  another  Hebrew  and 
said :  "Ikey,  I  never  had  such  a  wonderful  business."  Ikey  said :  "Yes, 
I  know."  He  said:  "My  sales  last  month  were  bigger  than  I  ever  had 
before."  He  said:  "Veil?"  The  first  Hebrew  said:  "Make  a  guess  how 


THE  AMERICAN  MINING  CONGRESS  27 

much  my  sales  were."  Ikey  said:  "How  could  I  guess?"  "Veil,  make 
a  guess."  "I  can't."  He  said:  "Veil,  half."  "Vat,  half  vat?"  Ikey 
said:  "Half  of  anything  you  say,  you  hound."  [Laughter.] 

I  am  reminded  of  the  Arkansas  fellow  who  owned  a  railroad  from 
his  town  out  to  the  mine — one  mile.  He  called  it  "The  Arkansas  and 
Great  Southeastern  Railroad."  So  he  wrote  a  letter  to  the  president  of 
the  Wabash  System:  "Sir,  I  have  the  honor  to  enclose  you  herewith  an 
annual  pass  over  my  railroad,  the  Arkansas  and  Great  Southeastern 
Railroad,  and  I  would  thank  you  to  return  the  courtesy  by  sending  me  a 
pass  over  the  Wabash  System."  So  the  president  of  the  Wabash  had 
his  private  secretary  look  in  the  railroad  guide,  and  there  was  no  such 
road. 

He  sent  a  Secret  Service  man  down  there  to  find  out  who  this  swindler 
was.  When  the  Secret  Service  man  got  down  there  and  saw  the  road, 
and  saw  the  mine  a  mile  away,  he  said:  "You  ought  to  be  ashamed  of 
yourself.  The  idea  of  your  writing  to  the  Wabash  for  a  pass  over  their 
wonderful  system  from  New  York  City  way  out  to  the  Far  West  in 
exchange  for  a  pass  over  this  thing  of  yours.  What  do  you  mean?" 
"Well,"  said  the  Irishman,  "I'll  tell  you  one  thing.  Your  railroad  may 
be  longer  than  mine,  but,  by  golly,  it's  no  wider."  [Laughter.] 

International  Delegates 

I  do  not  know  if  you  gentlemen  have  realized  yourselves  the  extent 
of  this  great  Congress  which  you  have  brought  here  to  St.  Louis.  It  has 
been  suggested  to  me  by  Mr.  Callbreath  and  Mr.  Burns  that  I  tell  you 
something  that  will  interest  you.  There  are  seven  countries  represented 
at  this  Congress:  France,  Sweden,  Russia,  Canada,  Belgium,  Mexico, 
and  the  United  States  of  America.  I  am  going  to  ask  two  gentlemen 
who  represent  these  foreign  countries  if  they  will  stand  for  a  moment 
that  you  may  give  them  the  applause  they  deserve  for  being  with  you. 
Monsieur  Audoin,  of  France,  a  member  of  the  French  High  Commission. 

(Rising  greeting  extended  Monsieur  Audoin.) 

Monsieur  Audoin  is  a  consulting  engineer  in  his  own  country,  in  the 
steel  industry. 

Another  gentleman,  who  represents  Sweden,  Mr.  N.  V.  Hansel,  a  min- 
ing engineer  of  that  country. 

(Rising  greeting  extended  Mr.  Hansel.) 

A  third  gentleman,  who  comes  farther  than  all  of  them,  and  who  will 
be  introduced  to  you  again  later  for  an  address,  Mr.  Foss,  of  Russia. 

(Rising  greeting  extended  Mr.  Foss.) 

It  is  my  private  opinion  that  other  foreign  delegates  have  gone  to 
the  theatre  with  the  ladies.  [Laughter.] 

The  next  speaker  is  a  gentleman  for  whom  I  have  the  deepest  sym- 
pathy, a  Congressman  from  Kansas,  who  has  been  over  in  the  National 
Legislature  wrangling,  fighting  and  rowing  over  this  aforesaid  League 
of  Nations  and  other  things. 

I  am  reminded  of  a  story  they  tell  which  might  illustrate  the  posi- 
tion you  have  been  in:  A  man  met  a  friend  in  front  of  the  great 


28  REPORT  OF  PROCEEDINGS 

cathedral,  and  just  at  that  moment  the  wonderful  bells  began  to  ring, 
"Ding,  dong,  dong,  dong,  ding,  dong,  dong."  He  said:  "Old  man, 
when  I  hear  those  bells  it  brings  me  back  to  the  days  of  my  boyhood,  to 
my  dear  mother,  who  brought  me  to  this  church  by  the  hand.  We  entered 
those  sacred  portals,  and  it  brings  back  a  deep,  solemn  feeling  to  my 
heart."  The  other  fellow  said:  "I  can't  hear  you  for  them  d — d  bells." 
[Laughter.] 

Address  by  Congressman  Strong 

May  I  have  the  pleasure  then,  gentlemen,  of  introducing  to  you  a  gen- 
tleman of  the  National  Congress,  who  is  a  member  of  the  Banking  Com- 
mittee. He  has  not  been  given  a  topic ;  therefore,  he  has  the  whole  earth 
to  roam  over — including  Canada.  The  Hon.  John  G.  Strong,  Representa- 
tive from  Kansas. 

(The  address  by  Mr.  Strong  will  appear  on  page  379.) 

TOASTMASTER  LEE :  The  difficulties  of  a  Congressman  are  many 
and  manifold,  as  you  have  heard  the  gentleman  say.  They  remind  me 
of  the  story  they  tell  of  the  minister  of  the  Gospel  who  was  suddenly 
called  in  to  preach  a  funeral  sermon  because  the  regular  preacher  had 
had  an  automobile  accident  and  was  injured.  He  came  into  the  home  of 
the  bereaved  family  without  any  knowledge  of  the  sex  of  the  deceased 
person;  so  he  started  off,  as  ministers  will,  and  said:  "We  have  come 
here  today  to  say  a  last  word  for  our  departed  friend" — and  then  he 
remembered  that  he  had  to  know  the  sex  to  go  on — and  he  leaned  over 
and  said,  "Brother  or  sister?"  to  a  lady  who  seemed  to  be  a  member  of 
the  family.  And  she  said,  "No,  cousin."  [Laughter.] 

I  have  been  asked  to  make  an  explanation  or  an  apology  to  you  gentle- 
men for  the  enforced  absence  from  this  Convention  of  two  of  our  St.  Louis 
gentlemen  in  the  mining  industry,  Mr.  Brewster  and  Mr.  Kavanaugh.  I 
know  that  they  have  both  put  in  hours  and  days  in  arranging  this  Con- 
vention, and  only  at  the  last  moment  they  were  called  to  Washington, 
and  have  not  been  permitted  to  come  back  home  to  greet  you  gentlemen. 
It  is  with  great  regret  they  have  telegraphed  that  they  cannot  be  here. 

The  next  gentleman  I  may  introduce  to  you  for  some  announcements. 
I  am  reminded  of  the  story  they  tell  of  the  railroad  president  who  was 
riding  along  in  his  private  car.  A  fellow  came  walking  by — one  of  the 
employes  of  the  road — and  the  president  leaned  out  and  said:  "I  say, 
old  man,  how  long  have  you  been  on  this  road?"  He  said:  "I  have  been 
here  40  years."  "Forty  years,  is  that  so?  Have  you  ever  been  pro- 
moted?" "No,  sir,  I  have  the  same  job  I  had  40  years  ago."  "Is  that 
so?  That  ought  to  be  looked  into.  What  do  you  do?"  He  said:  "You 
know  that  fellow  that  goes  along  with  a  hammer  and  taps  the  wheels, 
do  you?"  He  said:  "Yes,  I  know  him."  "Well,"  the  old  man  said,  "I 
helps  him  listen."  I  do  not  believe  we  can  bring  that  accusation  against 
the  ever  busy  secretary  of  this  Congress,  Mr.  Callbreath,  who  wants 
to  make  some  announcements. 

SECRETARY  CALLBREATH:  Mr.  Toastmaster  and  Gentlemen:  I 
want  to  urge  you  to  be  present  more  promptly  at  the  meetings.  We 


THE  AMERICAN  MINING  CONGRESS  29 

have  two  sessions  in  the  morning  and  two  in  the  afternoon,  and  we 
urge  that  you  be  in  your  seat  promptly  at  the  time  appointed. 

I  want  also  to  say  that  the  evening  session  of  the  Convention  will  be 
dispensed  with  tomorrow,  and  we  shall  devote  the  whole  evening  to  a 
discussion  of  the  business  affairs  of  The  American  Mining  Congress.  The 
meeting  will  be  in  the  Red  Room  of  this  hotel,  and  I  want  to  say  to 
all  of  you  who  are  members  of  The  American  Mining  Congress  that  we 
want  you  to  come  and  help  us  work  out  our  problems.  We  shall  elect 
directors,  and  we  shall  have  a  discussion  of  the  plans  by  which  we  may 
put  into  effect  the  resolutions  you  gentlemen  adopt. 

May  I  urge  you  gentlemen  to  be  present  at  all  meetings  and  be  present 
at  7.45  o'clock  tomorrow  evening?  Those  speakers  on  the  program  for 
tomorrow  evening  will  be  passed  over  until  the  Friday  session. 

Russia  and  America 

TOASTMASTER  LEE :  I  am  about  to  present  to  you  the  distinguished 
gentleman  from  Russia,  and  to  him  I  want  to  say  that  our  sentiment 
toward  Russia,  the  sentiment  of  America  toward  Russia,  is  a  very  warm 
one.  We  want  you  to  understand,  sir,  that  our  attitude  toward  your  coun- 
try is  not  expressed  in  the  story  they  tell  of  the  Britisher  who  came  into 
a  book  store  kept  by  an  Irishman  and  said :  "Have  you  that  book  'Who's 
Who  and  What's  What,'  by  Richard  Harding  Davis?"  The  Irishman  said: 
"No,  we  haven't  got  that,  but  we  have  one  that  is  better."  He  said :  "Yes, 
what  is  that?"  "'Who  You  Are  and  What  You  Owe,'  by  R.  G.  Dun  & 
Company."  [Laughter.] 

May  I  present,  then,  the  chairman  of  the  Russian  Mining  Commission 
under  the  Kerensky  Government,  a  gentleman  who  is  interested  in  plati- 
num, in  copper  mining,  and  in  the  making  of  shells,  a  miner  and  a  manu- 
facturer, the  Hon.  F.  F.  Foss? 

(The  address  by  Mr.  Foss  will  appear  on  page  385.) 

TOASTMASTER  LEE:  I  feel  convinced,  after  hearing  the  distin- 
guished gentleman  from  Russia,  that  if  Russia  does  not  do  one  thing  to 
straighten  herself  out,  she  will  do  another,  and  let  me  illustrate  with 
another  story: 

A  St.  Louis  coal  mining  man  went  to  Kansas  City.  When  he  got  there 
some  of  the  fellows  in  Kansas  City  had  him  out  (this,  of  course,  was 
before  July  1)  during  the  afternoon,  and  when  he  got  back  to  the  hotel 
he  found  that  he  had  missed  the  last  train  home.  He  hunted  up  a  public 
stenographer  in  the  hotel  and  said:  "Young  lady,  I  want  to  write  a 
letter  home  to  my  darling  wife."  "Very  well."  She  got  the  address,  and 
he  said :  "My  darling  wife — I  sit  myself  down  to  write  you  a  few  lines 
to  let  you  know  that  I  have  been  exceedingly  busy  all  afternoon,  and,  un- 
fortunately, I  have  missed  the  train  home,  and  will  not  be  in  your  darling 
arms  in  the  morning,  as  I  had  hoped.  Instead,  therefore,  I  will  take  the 
train  for  Osawatomie,  Kansas."  She  said :  "I  beg  your  pardon,  but  how  do 
you  spell  that  word  'Osawatomie'?"  "Don't  you  know  how  to  spell  that? 
Well,  what  do  you  know  about  that — don't  know  how  to  spell  Osawatomie, 


30  REPORT  OF  PROCEEDINGS 

and  you  live  right  near  it!  Well,  cut  it  out  and  1*11  go  to  Omaha." 
[Laughter.] 

The  next  speaker,  a  distinguished  gentleman  from  Canada,  I  under- 
stand, is  of  the  Presbyterian  faith.  The  story  goes  that  the  Presbyterian 
minister  was  exhorting  his  congregation  and  he  said:  "Oh,  my  friends, 
avoid  hell,  avoid  hell!  Oh,  the  terrible  thought  of  the  future  to  those 
who  have  not  lived  a  right  life!  My  friends,  hell  is  paved  with  cham- 
pagne, chorus  girls  and  automobiles."  A  voice  in  the  back  said :  "0  death, 
where  is  thy  sting?"  [Laughter.] 

I  see  from  the  laughter  that  none  of  you  are  afraid. 

Attitude  of  British  Labor 

The  gentleman  whom  I  shall  have  the  pleasure  of  introducing  has  just 
been  studying  labor  conditions  in  England.    May  I  present  to  you,  then, 
Maj.  Charles  W.  Gordon,  of  the  43rd  Cameron  Highlanders,  of  Canada? 
(Rising  greeting  was  extended  to  Dr.  Gordon.) 
(The  address  by  Dr.  Gordon  will  appear  on  page  392.) 

TOASTMASTER  LEE:  Gentlemen,  as  I  heard  the  wonderful  words 
of  this  man  I  seemed  to  remember  the  writings  of  Ralph  Connor,  and 
this  is  Ralph  Connor.  [Applause.] 

I  said  to  you  gentlemen  some  time  ago  that  this  Congress  was  a  bigger 
Congress  than  you  thought  it  was,  and  I  said  that  there  were  seven  coun- 
tries represented  here.  It  is  even  bigger  than  that;  I  learn  from  your 
assistant  secretary  that  there  are  eight  countries  here,  and  I  shall  ask 
the  gentleman,  if  he  is  still  present,  to  stand  that  we  may  give  a  greet- 
ing to  Bulgaria  in  the  person  of  Mr.  Constantine  Stephanoff,  consulting 
engineer  in  the  Bureau  of  Consulting  Engineers. 

(Rising  greeting  extended  to  Mr.  Stephanoff.) 

Now,  gentlemen,  we  are  coming  to  the  close  of  our  banquet.  I  hope 
we  have  had  a  good  time  together.  The  ladies  will  be  waiting  for  you 
gentlemen  at  the  Statler  Hotel. 

I  will  close  the  banquet  with  this  story,  which  I  have  told  to  illustrate 
what  it  does  not  illustrate  here  tonight — that  so  much  can  be  said  and  so 
little  said.  We  have  had  a  feast  of  reasoning  and  flow  of  soul  tonight. 

(Toastmaster  Lee  told  the  story  of  the  Chinaman,  the  yellow  dog  and 
the  police  magistrate — mostly  in  Chinese — a  language  not  understood  by 
the  official  reporter,  a  fact  regrettable  in  the  extreme,  as  it  sounded  as  if 
it  was  the  best  of  the  evening.) 

The  distinguished  president  on  my  left  said  he  was  going  to  take  a 
memorandum  of  a  story  or  two  that  I  told  tonight.  I  defy  him  to  take 
that  one  down.  [Laughter.] 

Gentlemen,  we  are  at  the  end  of  our  evening.  It  has  been  a  mighty 
pleasant  one  for  me;  it  is  my  hope  that  it  has  been  for  you.  I  bid  you 
"Good  Night." 


THE  AMERICAN  MINING  CONGRESS  31 

FIFTH  GENERAL  SESSION 
EXPOSITION  HALL,  THURSDAY  AFTERNOON,  NOVEMBER  18 

The  meeting  convened  at  3  P.  M.  in  the  Exposition  Hall. 

PRESIDENT  WELLS:  The  Convention  will  be  in  order,  and  in  the 
absence  of  the  secretary,  I  will  read  you  the  resolutions  which  have  been 
offered,  which,  you  will  understand,  are  simply  read  and  referred  with- 
out debate  to  the  Resolutions  Committee. 

(Resolutions  were  read  by  Mr.  Wells.) 

MR.  WELLS:  It  is  my  privilege  and  pleasure  to  introduce  to  you, 
as  chairman  of  this  afternoon's  Convention,  Mr.  Alva  C.  Dinkey,  presi- 
dent of  The  Midvale  Steel  Company,  of  Philadelphia.  Mr.  Dinkey  is  a 
loyal  member  and  an  active  supporter  of  the  work  of  The  American 
Mining  Congress,  and  it  is  a  privilege  to  have  him  here  with  us. 

Uses  of  Explosives 

CHAIRMAN  DINKEY:  I  appreciate  that  and  I  will  do  my  best  for 
you.  We  will  now  listen  to  an  address  by  Mr.  R.  H.  Summer,  of  the  Du 
Pont  Powder  Co.,  Wilmington,  Del.,  on  the  "Practical  Uses  of  Explosives 
From  a  Safety  Standpoint." 

(Mr.  Summer's  address  will  appear  on  page  407.) 

Physical  Efficiency 

CHAIRMAN  DINKEY:  We  have  heard  a  very  valuable  paper.  Our 
next  address  is  on  "Physical  Efficiency — Its  Effects  on  Production,"  by 
Mr.  E.  Dana  Caulkins,  secretary  of  the  National  Physical  Education 
Service,  Washington,  D.  C. 

(Mr.  Caulkin's  address  will  appear  on  page  416.) 

MR.  CAULKINS:  I  have  given  the  chairman  a  brief  resolution.  I 
thought  that  if  you  were  sufficiently  interested,  The  American  Mining 
Congress  might  want  to  go  on  record  to  some  extent  as  regards  physical 
efficiency. 

(Read  resolution.) 

Effect  of  Prohibition 

DELEGATE :  I  would  like  to  know  what  effect  prohibition  will  have 
upon  physical  fitness. 

MR.  CAULKINS:  That  is  one  question  upon  which  I  did  not  speak. 
Increase  in  leisure  time  has  not  yet  proved  itself  an  asset.  In  many 
cases  it  is  a  liability,  and,  it  seems  to  me,  with  the  elimination  of  liquor, 
which  filled  a  big  place  in  the  life  of  the  workman,  helping  to  fill  in  his 
leisure  time  with  damage  to  himself  physically,  we  must  find  some  means 
of  stimulating  and  educating  men  and  women  so  that  they  will  fill  in 
their  leisure  time  without  detriment.  We  should  get  hold  of  the  children 
and  train  them  so  that  they  will  use  their  leisure  time  in  harmless  ways- 
then  we  should  have  accomplished  a  good  deal.  [Applause.] 


32  REPORT  OF  PROCEEDINGS 

CHAIRMAN  DINKEY:  Are  there  any  questions?  If  not,  I  will  say  in 
respect  to  the  resolution  referred  to  by  Mr.  Caulkins  that  I  think  the  com- 
mittee will  concur  in  his  views. 

Minerals  Separation  Case 

Our  next  paper  is  on  "The  Minerals  Separation,  Ltd.,  Situation,"  by 
Mr.  George  L.  Nye,  special  counsel  of  The  American  Mining  Congress, 
Denver,  Col. 

MR.  NYE:  Ladies  and  Gentlemen:  I  have  prepared  this  address 
in  the  form  of  a  paper,  and  I  shall  take  the  liberty  of  reading  it  to  you, 
not  because  I  am  not  prepared  to  talk  all  the  afternoon  on  this  subject — 
because  I  could  easily  do  so — but  because  it  is  a  question  with  me  of  what 
not  to  say,  and  I,  therefore,  have  carefully  selected  from  the  mass  of 
material  that  which,  it  seems  to  me,  will  interest  you  most. 

Something  Has  Happened 

I  regret  very  much  that  there  are  not  more  members  of  the  Congress 
and  more  delegates  present,  because  it  is  a  matter  which  vitally  affects 
every  member  of  The  American  Mining  Congress,  from  the  Atlantic  to 
the  Pacific  and  from  the  Great  Lakes  to  the  Gulf.  This  American  Min- 
ing Congress,  you  should  know,  is  not  a  one-man  proposition.  It  is  the 
good  old  idea  of  "all  for  one  and  one  for  all,"  and  this  is  a  matter  which 
interests  the  coal  man  and  the  salt  miner  just  as  much  as  it  interests 
the  metal  miner,  and  it  is  a  matter  which  everybody  ought  to  pay  atten- 
tion to,  and  which  everyone  ought  to  consider.  We  have  got  to  consider 
it.  It  is  a  question  of  the  whole  mining  industry  of  this  country,  and  if 
we  do  not  have  a  care,  sooner  or  later  the  mining  industry  in  this  country 
is  going  to  wake  up  to  a  realization  of  the  fact  that  something  has  hap- 
pened. They  are  going  to  be  in  the  situation  of  the  Swedish  witness  who 
was  put  on  the  stand  some  years  ago  in  a  case  against  a  railroad  com- 
pany in  the  Northwest  for  personal  injuries,  and  it  developed  that  he 
was  a  friend  of  the  deceased,  and  the  counsel  of  the  plaintiff,  the  executor 
of  the  estate,  placed  Eric  upon  the  stand  and  said  to  him :  "Now,  Eric,  I 
want  you  to  just  go  ahead  and  tell  everything  that  took  place  at  the  time 
Ole  was  killed."  Eric  drew  a  long  breath  and  said :  "Well,  you  see,  Ole 
and  I  were  walking  along  the  railroad  track  and  the  train  came  around 
the  curve.  I  stepped  over  to  one  side  and  let  the  train  go  by,  and  when 
I  turned  around  I  don't  see  Ole.  I  walked  along  a  little  way  and  I  saw 
Ole's  arm,  and  I  walked  a  little  farther  and  I  saw  Ole's  foot,  and  I  walked 
a  little  farther  and  I  saw  Ole's  head,  and  I  say  to  myself:  'My  God, 
something  must  have  happened  to  Ole'!" 

That  is  just  the  situation  we  are  going  to  be  in.  We  are  going  to  wake 
up  some  of  these  days  to  the  fact  that  something  has  happened  to  the 
mining  industry  if  we  do  not  pay  attention  to  questions  as  important  as 
this  question  of  oil  flotation. 

(Mr.  Nye's  address  will  appear  on  page  420.) 

(President  Wells  resumed  the  chair.) 


THE  AMERICAN  MINING  CONGRESS  33 

MR.  H.  W.  SEAMAN:  I  would  like  to  ask  whether  this  splendid 
address  will  be  printed  in  any  of  the  publications? 

CHAIRMAN  WELLS :  It  is  my  understanding  that  such  is  to  be  the 
case,  but  it  will  rest  with  the  Convention  itself  and  members  of  the 
Congress  as  to  whether  they  desire  to  have  the  expense  of  printing  all 
or  part  of  it. 

MR.  SEAMAN:  It  seems  to  me,  there  has  been  no  more  important 
contribution,  in  my  memory  of  The  American  Mining  Congress,  than 
this  address  by  Mr.  Nye,  and  I  think  we  should  see  that  it  has  sufficient 
circulation. 

CHAIRMAN  WELLS :  I  concur  very  heartily  in  what  you  say.  If  the 
members  will  authorize  the  expense,  I  am  sure  the  officers  will  desire  to 
have  this  printed. 

(Chairman  Wells  made  several  announcements  regarding  changes  in 
program.) 

Federal  Regulation  of  Explosives 

Mr.  Clarence  Hall,  explosives  engineer,  of  the  Bureau  of  Mines,  was 
then  introduced  to  discuss  Federal  control  of  explosives. 
(His  address  will  appear  on  page  441.) 

Minnesota  Iron  Mines 

CHAIRMAN  WELLS :  Our  next  speaker  is  Hon.  F.  A.  Wildes,  State 
Superintendent  of  Mines,  Hibbing,  Minn.,  whose  topic  is  "The  Minnesota 
Leasing  System." 

(Mr.  Wildes'  address  will  appear  on  page  471.) 

Application  of  Transmission 

Mr.  J.  W.  Ferguson,  power  engineer,  of  St.  Louis,  was  introduced  to 
discuss  the  modern  methods  of  applying  power. 
(His  address  will  appear  on  page  462.) 

(Chairman  Wells  made  announcements  regarding  program,  whereupon 
the  Convention  adjourned  at  5.30  P.  M.  until  10  o'clock  Friday  morning.) 


SIXTH  GENERAL  SESSION 
EXPOSITION  HALL,  FRIDAY  MORNING,  NOVEMBER  21 

The  meeting  convened  at  10.30  A.  M.  in  Exposition  Hall. 

SECRETARY  CALLBREATH:  Will  you  please  come  to  order?  We 
have  a  very  crowded  program  today,  and  it  will  be  necessary  to  work 
under  quick  action.  The  Resolutions  Committee  will  occupy  a  good  deal 
of  your  time,  and  you  have  a  full  program. 

I  take  pleasure  in  introducing  to  you  the  chairman  of  the  meeting, 


34  REPORT  OF  PROCEEDINGS 

Mr.  Charles  A.  Stillman,  president  of  The  Rogers-Brown  Ore  Co.,  of 
Chicago. 

(Mr.  Charles  A.  Stillman  assumed  chair.) 

CHAIRMAN  STILLMAN:  It  gives  me  pleasure  to  introduce  to  you 
Mr.  John  A.  Davis,  governor  of  the  Alaska  Chapter  of  The  Amer- 
ican Mining  Congress,  who  will  speak  to  you  on  the  subject  of  "Alaska, 
a  National  Opportunity,"  followed  by  a  moving  picture  furnished  by  Mr. 
Burton  Holmes,  complimentary  to  The  American  Mining  Congress. 

(Mr.  Davis*  paper  will  appear  on  page  474.) 

MR.  DAVIS :  I  might  say  that,  thanks  to  the  courtesy  of  the  Burton- 
Holmes  Travelogues,  I  will  be  able  to  have  thrown  on  the  screen  a  picture 
showing  the  country  in  Alaska,  from  the  head  of  navigation  on  the  Yukon 
River  to  Fairbanks,  the  most  important  metropolis  in  that  district. 

(The  Burton-Holmes  Travelogue  picture  films  were  then  shown.) 

Officers  Elected 

CHAIRMAN  STILLMAN:  We  will  ask  the  secretary  to  announce  the 
election  of  officers  and  directors  of  The  American  Mining  Congress. 

SECRETARY  CALLBREATH :  At  the  meeting  last  night  the  follow- 
ing directors  were  elected:  Dr.  R.  C.  Allen,  of  Cleveland;  Col.  Daniel  B. 
Wentz,  of  Philadelphia,  a  very  prominent  operator  in  coal,  both  anthra- 
cite and  bituminous;  Mr.  Thomas  T.  Brewster,  of  St.  Louis,  who  has  been 
chairman  of  the  Committee  on  Arrangements  here,  and  is  now  in  Wash- 
ington representing  the  bituminous  coal  operators  in  reference  to  stop- 
ping the  strike  in  operation,  and  Mr.  John  C.  Howard,  of  Salt  Lake  City, 
Utah. 

After  the  election  of  the  directors  the  Board  of  Directors  assembled 
and  elected  officers  as  follows: 

President,  Bulkeley  Wells,  Denver,  Col.,  (re-elected) ;  first  vice-presi- 
dent, Harry  L.  Day,  Wallace,  Idaho;  second  vice-president,  Col.  D.  B. 
Wentz,  Philadelphia;  third  vice-president,  E.  L.  Doheny,  Los  Angeles; 
secretary,  J.  F.  Callbreath. 

Executive  Committee 

Members  of  the  Executive  Committee  to  serve  with  the  president:  E. 
P.  Mathewson,  of  New  York,  and  Walter  Douglas,  of  New  York. 

That  gives  the  report  for  your  consideration. 

CHAIRMAN  STILLMAN:  Something  over  a  year  ago,  after  the 
signing  of  the  Armistice,  industry  realized  that  it  was  through  with  the 
problems  of  war,  but  very  few  of  us  foresaw  that  possibly  the  problems 
of  peace  might  equal  the  problems  of  war. 

In  turn,  your  attention  has  been  given  to  matters  concerning  taxes, 
finances  and  legislation,  but  probably  more  of  your  time  and  attention 
has  been  directed  toward  the  labor  problem,  and  this  problem  has  not  yet 
been  entirely  solved. 

Industrial   Democracy 

A  few  weeks  ago,  as  I  was  leaving  the  office  of  a  prominent  corpora- 
tion attorney  in  Chicago,  he  picked  up  a  book  and  handed  it  to  me  with 


THE  AMERICAN  MINING  CONGRESS  35 

the  suggestion  that  I  read  it.  He  said:  "This  book  contains  more  com- 
mon sense  on  the  subject  of  labor  problems  than  anything  I  have  seen 
published."  The  title  of  that  book  was  "Man  to  Man,"  and  I  have  the 
pleasure  today  to  introduce  to  you  the  author  of  that  work,  Mr.  John 
Leitch,  industrial  engineer,  New  York  City. 

(Mr.  Leitch's  address  will  appear  on  page  487.) 

Regrets  from  Governor  Lowden 

CHAIRMAN  STILLMAN:  I  want  to  read  a  telegram  that  has  just 
been  received  by  Mr.  Piez: 

Hon.  Charles  Piez,  Care  Planters'  Hotel,  St.  Louis,  Mo.: 

Your  letter  of  November  13th  received.  I  have  been  compelled 
to  decline  the  invitation  to  The  American  Mining  Congress  on 
account  of  pressure  of  official  duties  here.  I  trust  you  will  under- 
stand that  if  I  had  consulted  only  my  own  pleasure,  I  should 
have  been  with  you. 

I  send  my  heartiest  greetings  to  the  Congress,  and  wish  for  it 
a  most  profitable  session. 

FRANK  O.  LOWDEN. 
[Applause.] 

Handling  Labor 

Some  time  after  the  United  States  entered  the  war  the  Government 
realized  that  to  win  the  war  we  needed  ships,  and  to  build  ships  we 
needed  to  man  the  industry  with  men  of  experience  and  ability,  men  who 
understood  the  labor  problems  and  who  had  executive  ability.  We,  in 
Chicago,  were  not  surprised  to  learn  that  we  were  to  lose,  temporarily, 
Mr.  Piez  from  our  midst.  The  Government  put  Mr.  Piez  in  the  ship 
building  business,  and  Mr.  Piez  put  boats  on  the  ocean.  I  have  the  pleas- 
ure to  introduce  to  you  Mr.  Charles  Piez,  of  Chicago,  president  of  the 
Link-Belt  Company. 

MR.  PIEZ:  Mr.  Chairman,  Ladies  and  Gentlemen:  I  came  here  be- 
cause I  was  asked  to  do  so  by  Mr.  Carl  Scholz,  who  was  for  three  years 
president  of  The  American  Mining  Congress,  and  he  asked  me  whether 
I  would  not  tell  a  story  that  I  told  him  several  years  ago. 

I  went  to  Washington  soon  after  the  war  started,  worked  on  several 
committees,  and  met  Scholz  one  day  on  Michigan  Avenue,  in  Chicago. 
He  said:  "Piez,  how  are  things  going  down  in  Washington?"  I  said: 
"Well,  they  remind  me  very  much  of  a  remark  made  by  a  Pennsylvania 
Dutchman  who  lived  close  to  our  works  in  Philadelphia. 

"He  had  been  doing  foundation  work  around  the  plant  for  many  years, 
and  he  got  a  large  job  at  the  Midvale  Steel  Company's  plant,  which  was 
then  under  the  old  management  of  the  Midvale  Steel  Company.  Some 
months  after  I  met  him  and  said:  'August,  how  are  you  getting  along 
at  the  Midvale  plant?'  He  said:  'Mr.  Piez,  that  Midvale  is  an  awful  plant 
to  work  in.  Over  there  100  men  can  tell  you  to  stop  and  only  one  man 
can  tell  you  to  go  ahead,  and  he  is  all  the  time  in  New  York.'  "  [Laughter.] 

I  want  to  say  that  I  appreciate  very  much  the  sermon — for  it  was  a 
sermon  that  Mr.  Leitch  delivered.  His  suggestion  that  we  get  back  to  the 


36  REPORT  OF  PROCEEDINGS 

men,  that  we  establish  a  man-to-man  contact  in  industry,  is  certainly 
sound.  I  am  not  going  into  detail.  Democracy  has  its  difficulties,  and  not 
all  of  our  democratically  managed  municipalities  are  equally  efficient.  If 
they  were  in  competition  with  each  other,  probably  greater  efficiency 
would  develop.  But  that  is  the  situation  in  business;  it  is  competitive; 
it  is  a  conflict,  and,  while  you  must  not  forget  the  spiritual  side  of  busi- 
ness, yet  you  must  pay  constant  heed  to  the  material  side,  for  your 
survival  depends  on  your  ability  to  pay  your  bills. 

The  industrial  situation  confronting  us  is  the  subject  of  the  address 
which  I  have  prepared. 

(Mr.  Piez's  address  will  appear  on  page  503.) 

CHAIRMAN  STILLMAN :  I  wish  to  call  the  attention  of  the  delegates 
to  the  invitation  of  Mayor  Kiel  and  the  City  Administration  for  an  auto- 
mobile ride  around  the  city  tomorrow  morning.  It  is  necessary  that 
delegates  register  this  evening,  so  automobiles  may  be  provided. 

Law  and  Order 

At  this  time  in  our  history,  when  we  are  all  confronted  with  industrial 
unrest  ,  it  takes  a  real,  red-blooded  American  to  stand  up  and  say :  "Thus 
far  shalt  thou  go  and  no  farther." 

In  the  person  of  Mr.  A.  H.  Roberts,  Law  and  Order  Governor  of  Ten- 
nessee, we  have  such  a  one.  He  is  a  guest  of  the  Congress  today 
and  will  speak  in  this  room  at  2  o'clock.  You  are  privileged  to  hear  an 
address  that  is  well  worth  your  time  and  attention,  and  we  ask  that  you 
be  promptly  on  time,  as  the  Congress  has  a  number  of  other  matters 
coming  up  immediately  after  this  address  and  it  will  be  necessary  to  call 
the  meeting  to  order  promptly  at  2  o'clock. 

R.  T.  Stull,  of  the  United  States  Bureau  of  Mines,  presented  an  ex- 
haustive and  valuable  paper  giving  the  results  of  Government  experi- 
ments in  the  uses  of  American  graphites  and  clays  in  the  manufacture 
of  crucibles. 

(His  paper  will  be  found  on  page  766.) 

Richard  B.  Moore,  Chief  Chemist  of  the  United  States  Bureau  of 
Mines,  who  had  completed  an  exhaustive  study  of  the  new  gas,  Helium, 
presented  a  paper  of  great  commercial  and  scientific  interest. 

(This  paper  appears  on  page  781.) 


THE  AMERICAN  MINING  CONGRESS  37 


NATIONAL  GOLD  CONFERENCE 

American  Mining  Congress 

FIRST  SESSION,  TUESDAY  AFTERNOON,  NOVEMBER  18 
HOTEL  STATLER,  ST.  LOUIS,  MO. 

The  National  Gold  Conference  convened  at  2.30  P.  M.,  Mr.  H.  W. 
Seaman,  of  Chicago,  presiding. 

CHAIRMAN  SEAMAN:  Gentlemen,  we  are  only  a  small  family  here 
at  the  present  time,  but  I  anticipate  that  the  results  of  this  meeting  and 
of  the  meetings  to  be  held  will  have  a  far-reaching  influence  in  obtaining 
what  we  are  after.  We  are  met  in  this  Gold  Conference  as  a  sub-division 
of  The  American  Mining  Congress,  to  devise  ways  and  means  whereby 
the  mining  industry  itself  may  be  placed  on  a  sound  business  basis,  and, 
more  than  that,  so  that  the  Government  which  has  issued  such  vast  reams 
of  securities  may  have  the  gold  itself  upon  which  to  predicate  the  pay- 
ment of  these  obligations.  That  is  the  vital  question,  it  seems  to  me. 

On  October  2  the  American  Bankers'  Convention  met  in  the  city  of 
St.  Louis  and  passed  a  resolution  in  evidence  of  their  appreciation  of 
the  vast  importance  of  this  subject.  I  would  like  to  have  that  resolu- 
tion— which  really  is  the  basis  of  the  action  we  should  take  here — 
read,  so  that  you  may  be  fully  advised  as  to  the  real  purpose  of  this 
Gold  Conference.  We  all  know  the  trials  and  tribulations  of  the  gold 
miner,  but  our  own  advancement  must  be  secondary  to  that  of  our  Gov- 
ernment itself.  We  must  either  face  repudiation  of  these  debts  or  else 
we  must  produce  the  gold  that  we  have  agreed  to  pay  in  settlement  of 
those  obligations,  and  that,  gentlemen,  is  far  greater  than  the  ills  or 
trials  or  troubles  of  the  gold  miners,  and  I  believe  we  should  treat  this 
subject  from  that  standpoint. 

Therefore,  when  the  bankers,  who  are  our  mentors  in  financial  matters, 
in  this  country  appreciate  that  we  do  not  have  sufficient  amount  of  gold 
upon  which  to  predicate  these  vast  debts,  then  we  should  take  warning.  I 
will  ask  Mr.  H.  N.  Lawrie  to  read  the  resolution  as  passed,  and  also  a  com- 
munication from  Mr.  Clausen,  vice-president  of  the  Chemical  National 
Bank,  of  New  York,  in  which  he  takes  a  similar  view. 

American  Bankers'  Resolutions 

MR.  LAWRIE :  Mr.  Chairman,  Ladies  and  Gentlemen :  Your  chair- 
man has  well  stated  the  premise  of  the  Gold  Conference.  We  are 
simply  here  by  an  invitation  of  the  bankers,  I  take  it,  as  you  will  see 
from  this  resolution,  to  assist  them  in  the  formulation  of  a  constructive 
plan  or  policy  by  which  the  monetary  reserve  of  the  country  may  be 
protected. 

I  will  take  the  liberty  of  reading  this  resolution  because  it  is  the 
premise  of  our  Conference.  This  was  passed  on  October  2,  unanimously 


38  REPORT  OF  PROCEEDINGS 

and  without  oppositional  debate,  before  the  American  Bankers'  Asso- 
ciation. 

WHEREAS,  The  gold  production  of  the  United  States,  which 
declined  so  rapidly  during  the  war  period,  has  since  the  signing 
of  the  Armistice  still  further  declined  because  of  the  extreme 
economic  pressure  to  which  the  gold-mining  industry  has  been 
subjected;  and 

WHEREAS,  Gold  is  the  standard  of  value  and  the  basis  of  all 
credit,  and  it  is  vitally  important  to  the  financial  and  com- 
mercial life  of  the  nation  that  the  monetary  reserve  be  pro- 
tected; now,  therefore,  be  it 

Resolved,  That  the  American  Bankers'  Association,  in  conven- 
tion assembled,  respectfully  requests  and  urges  upon  the  Gov- 
ernment of  the  United  States  the  desirability  of  maintaining 
the  domestic  production  of  new  gold  in  sufficient  volume  to  satisfy 
the  present  anticipated  trade  requirements  for  this  metal,  and 
asks  that  steps  be  taken  immediately  to  that  end;  and  be  it 
further 

Resolved,  That  the  secretary  of  this  Association  be,  and  hereby 
is,  instructed  to  send  a  copy  of  this  resolution  to  the  President 
of  the  United  States,  the  Secretary  of  the  Treasury,  and  the 
members  of  the  Senate  and  the  House  of  Representatives  of 
the  United  States,  advising  them  of  its  adoption;  and  be  it  also 
further 

Resolved,  That,  considering  the  great  importance  of  this  sub- 
ject, this  Convention  recommends  to  the  Executive  Council  that 
the  matter  be  referred  to  the  Federal  Legislative  Committee  and 
the  Currency  Commission  for  an  exhaustive  study  and  such 
action  as  may  be  deemed  necessary. 

Now,  in  the  report  of  the  proceedings  of  the  American  Bankers'  Asso- 
ciation, this  resolution  was  reported  as  the  third  in  line,  and  it  occupied 
a  very  prominent  position  in  their  proceedings. 

Significant  Statements  by  Leaders 

Now,  in  the  course  of  correspondence  which  was  conducted  from  the 
office  of  The  American  Mining  Congress,  inviting  the  producers  and 
economists  and  bankers  and  members  of  Congress  here,  many  replied, 
and  some  of  their  statements  were  very  significant,  and  I  think  you 
would  be  interested  in  hearing  a  few  of  these. 

The  Hon.  Franklin  K.  Lane  stated  in  his  letter  as  follows: 

The  problem  of  the  decline  in  the  output  of  gold  from  the 
mines  in  the  United  States  and  the  large  use  of  it  for  manu- 
facturing purposes,  with  the  resulting  effect  on  the  gold  re- 
serves of  the  country,  is  indeed  a  serious  one,  and  I  am  glad  to 
know  that  you  are  arranging  for  its  discussion  by  a  group  of 
men  who  should  be  able  to  add  much  to  the  solution  of  the 
problem.  I  wish  that  I  might  be  able  to  attend  the  Conference, 
but  other  important  official  duties  will  not  permit.  The  Con- 
ference has,  however,  my  hearty  approval,  and  I  hope  that  it 
will  be  productive  of  immediate  benefit. 

Representative  Edward  J.  King,  of  Illinois: 

I  am  greatly  interested  in  the  question  of  the  depletion  of 
the  monetary  gold  reserve  and  the  conditions  you  mention.  But 


THE  AMERICAN  MINING  CONGRESS  39 

I  wish  you  would  inform  me  of  your  suggestions  for  remedying 
matters.  I  would  appreciate  your  sending  me  the  published 
reports  on  the  Convention. 

Representative  Cordell  Hull,  of  Tennessee: 

I  feel  the  keenest  interest  in  the  problem  which  the  National 
Gold  Conference  has  before  it  for  consideration.  I  regret,  how- 
ever, that  I  will  probably  not  be  in  a  situation  that  will  permit 
me  to  attend  your  meeting.  I  shall,  however,  observe  its  delibera- 
tions very  closely. 

The  Director  of  the  Mint,  the  Hon.  Ray  D.  Baker: 

The  question  is  of  vital  interest  to  me  and  I  would  be  very  glad 
to  participate  were  it  possible. 

Others  included  in  this  invitation  were  some  very  prominent  members 
of  the  American  Numismatic  Society,  who  are  interested  in  the  collection 
of  coins,  and,  of  course,  this  question  has  a  very  vital  bearing  upon 
their  Society  and  membership.  Some  of  the  prominent  members  of  that 
Society  who  replied — 

Mr.  Edward  T.  Newell,  president  of  the  American  Numismatic  Society: 

The  members  of  the  Council  quite  concur  in  my  emphasis  upon 
the  importance  of  the  action  which  The  American  Mining  Con- 
gress proposes  to  take  at  its  meeting  in  St.  Louis  from  Novem- 
ber 17  to  22,  but  I  regret  to  report  that  it  has  been  impossible  for 
us  to  find  anyone  who  could  go  as  a  delegate  and  represent  us 
there  at  that  time.  I  realize  fully  the  importance  of  the  pro- 
posed action,  and  would  be  very  glad  indeed  to  have  you  inform 
me  of  the  action  of  the  Convention.  I  greatly  regret  that  I  am 
unable  to  send  you  a  more  cordial  response  in  such  a  matter 
which  is  of  so  vital  interest  to  the  Society  of  which  I  am  presi- 
dent. 

Mr.  Edward  D.  Adams: 

The  statements  made  in  the  circular  respecting  production  and 
trade  uses  for  gold  during  the  present  year,  at  this  time  when 
the  percentage  of  our  gold  reserve  to  pur  increasing  issue  of 
Federal  Reserve  Bank  currency  is  diminishing,  are  important 
and  should  prompt  the  earnest  consideration  of  plans  to  safe- 
guard the  position  of  our  country  in  its  relations  to  the  financial 
systems  of  all  other  nations. 

Mr.  Adams  is  in  a  very  unique  position  to  speak  because  of  his  finan- 
cial relationship. 

I  have  gotten  several  letters  from  mine  operators.  Mr.  John  G.  Kirchen, 
American  Gold  Conference,  Tonopah,  Nevada,  writes : 

I  trust  something  will  be  accomplished  at  this  meeting  and 
acted  upon  by  the  Federal  Government  that  will  give  the  gold 
producer  a  square  deal,  something  which  he  has  not  enjoyed  since 
the  recent  excessive  inflation  of  our  currency  system  and  which 
has  been  done  at  the  expense  of  the  gold  producer. 


40  REPORT  OF  PROCEEDINGS 

Some  of  the  bankers  who  responded — Mr.  James  Ringold,  vice-presi- 
dent of  the  United  States  National  Bank  of  Denver: 

The  subject  is  an  important  one  and  should  have  earnest  con- 
sideration. If  you  think  of  any  way  I  can  be  of  service,  please 
do  not  hesitate  to  command  me. 

Mr.  Irving  Howbert,  vice-president  of  the  First  National  Bank  of 
Colorado  Springs: 

I  am  very  much  interested  in  the  subject  to  be  considered  at 
the  meeting.  Our  gold  mines  in  this  region  are  on  the  ragged 
edge  and  unless  something  can  be  done  to  help  them  many  will 
be  closed  down  during  the  coming  year. 

Alaskan  Support 

Telegram  received  from  the  Fairbanks  Commercial  Club: 

We  strongly  support  object  National  Gold  Conference  and 
trust  practicable  relief  measures  may  be  formulated  for  encour- 
agement gold  production.  We  would  suggest  tax  on  gold  used  in 
industrial  arts  as  one  way  of  providing  bonus  on  gold  produc- 
tion. Output  gold  in  interior  Alaska  has  been  cut  in  half  since 
commencement  war,  and  unless  ameliorative  legislation  enacted 
there  can  be  no  recovery  in  this  important  industry,  notwith- 
standing the  great  areas  of  gold-bearing  ground  still  available 
for  mining. 

Telegram  received  from  the  Alaska  Chapter,  American  Mining  Con- 
gress : 

Alaska  Chapter  strongly  endorses  object  of  National  Gold 
Conference  and  hope  you  arrive  at  favorable  solution  of  gold 
problem  either  by  means  of  bonus  or  otherwise.  Interior 
Alaska's  main  product  is  gold  and  this  commodity  is  the  only 
one  that  has  remained  stationary  in  price.  This  condition  is  the 
cause  of  stagnation  in  mining  here  and  if  not  remedied  will  lead 
to  rapid  and  complete  closing  down  of  all  mines. 

Address  of  George  E.  Roberts 

On  the  program  you  will  notice  the  scheduled  address  of  Mr.  Roberts, 
vice-president  of  the  National  City  Bank  of  New  York.  He  has  prepared 
for  us  a  special  address  upon  this  very  important  subject,  and  you  all 
know  of  his  intimate  connection  with  the  financial  situation  as  it  stands 
today.  You  know  of  his  previous  connection  with  the  United  States  Mint, 
and  as  vice-president  of  the  National  City  Bank  he  is  also  in  position  to 
judge  of  the  international  importance  of  this  problem.  I  regretted  when 
I  learned  Monday  that  he  could  not  be  here.  On  account  of  the  stock 
market  jumble  they  had  last  week,  I  know  it  would  be  impossible  for  a 
banker  to  leave  at  this  critical  moment. 

(Mr.  Lawrie  read  Mr.  Roberts'  address,  which  appears  on  page  512.) 
MR.  LAWRIE :     I  think  we  quite  properly  must  agree  that  the  bank- 
ing interests  of  the  country  are  going  to  protect  the  gold  reserves. 


THE  AMERICAN  MINING  CONGRESS  41 

Address  of  John  Clausen 

Now,  Mr.  Clausen,  unfortunately,  has  been  under  a  very  heavy  pres- 
sure and  the  doctor  ordered  him  to  conserve  his  strength — he  intended  to 
be  here  up  to  the  very  last  minute,  and  he  regretted  it  very  much  and 
wanted  me  to  convey  his  regrets  at  not  being  able  to  be  here.  He  has 
put  a  good  deal  of  thought  on  this  subject,  and  as  vice-president  of  the 
Chemical  National  Bank  he  occupies  a  very  important  position  and  what 
he  says,  therefore,  will  carry  great  weight  with  the  public  at  large.  I 
believe  it  would  be  well  to  present  this  address  of  Mr.  Clausen  at  this 
time.  Many  of  you  may  not  have  seen  any  of  the  notes  in  reference 
thereto  and  it  has  a  great  many  statements  in  it  that  are  significant. 

CHAIRMAN  SEAMAN:  You  will  please  read  that  in  view  of  Mr. 
Clausen  not  being  here. 

(Mr.  Lawrie  read  the  address,  which  appears  on  page  518.) 

CHAIRMAN  SEAMAN:  It  hardly  seems  possible  that  this  Gold  Con- 
ference could  adjourn  after  merely  listening  to  this  discussion.  We 
should  go  from  this  Conference  organized  for  constructive  work,  some- 
thing that  is  concrete  to  bring  about  the  relief  that  we  are  seeking,  and 
before  we  adjourn  today  we  should  appoint  a  Committee  on  Resolutions 
which  will  prepare  or  see  that  resolutions  are  prepared  to  present  to 
the  Mining  Congress,  or  to  their  Committee  on  Resolutions,  and  see  if  we 
cannot  get  the  resolution  that  comes  from  this  Conference  passed  upon 
favorably  by  the  Mining  Congress. 

<Jold  Decline  in  Colorado 

We  will  now  have  the  pleasure  of  hearing  Mr.  George  M.  Taylor,  gen- 
eral manager  of  the  Portland  Gold  Mining  Company,  who  will  discuss  the 
gold  decline  in  Colorado. 

MR.  TAYLOR :  I  do  not  think  that  you  are  particularly  interested  in 
anything  I  can  say  as  to  the  reasons  for  the  decline  in  gold  production. 
I  think,  however,  that  you  are  all  interested  in  gold  production.  Our 
experiences  have  all  been  about  the  same. 

In  1915  Colorado  produced  $22,000,000  in  gold.  In  1918  production, 
dropped  to  $12,000,000— a  decline  of  $10,000,000.  In  Cripple  Creek  dis- 
trict, which  produces  about  60  per  cent,  of  the  gold  of  the  State  of  Col- 
orado, and  which  is  strictly  a  gold  camp,  having  no  silver,  the  production 
in  1915  was  $13,000,000.  In  1918  it  was  $8,000,000— a  decline  of  $5,000,- 
000  in  that  camp.  We  had  hoped  this  year  that  the  decline  would  not  be 
over  $2,000,000  and  that  we  would  produce  $6,000,000,  but  with  the  coal 
strike,  two  of  the  remaining  mines  having  closed  and  the  probability 
is  that  more  will  close  this  week,  I  am  afraid  we  will  not  reach  that 
$6,000,000  mark. 

Causes  of  Increased  Cost 

Now,  as  to  the  causes  of  the  increased  cost  of  production  of  gold.  It 
costs  more  to  make  a  gold  dollar,  and  that  is  due  to  the  increased  cost  of 


42  REPORT  OF  PROCEEDINGS 

materials  brought  on  by  the  world  war — powder,  fuse,  caps,  timber,  coal 
and  everything  that  is  used  in  mining,  including  wages.  On  the  first  of 
last  July  one  of  the  large  mines  in  Cripple  Creek  figured  that  the  increased 
cost  of  materials  over  the  first  of  July,  1914,  was  103  per  cent.  We  have 
not  paid  as  high  wages  in  Cripple  Creek  as  many  of  the  other  mining 
camps  have.  Before  the  war  we  were  paying  muckers  $3  and  drillmen 
$4.  After  we  entered  the  war  drillmen  were  raised  to  $4.25,  three  months 
later  to  $4.50,  and  we  had  the  experience  that  all  others  have:  that  when 
a  man  got  to  $4  he  did  less  work  than  when  he  made  $3,  and  when  he  got 
to  $4.50  he  did  still  less.  And  then  we  adopted  the  contract  system,  doing 
much  more  work  by  contract  than  we  had  ever  before.  Any  man  who 
wants  to  work  on  a  contract  will  make  $5.  Many  make  from  $7  to  $10, 
but  we  have  had  the  experience  that  all  other  industries  have:  when  the 
man  began  making  $7  or  $8  a  day  he  drew  his  check  and  did  not  come 
back  for  three  or  four  days,  and  the  increased  pay  didn't  make  it  easier 
to  get  our  work  done. 

In  our  district  there  are  not  enough  men,  not  enough  miners  to  do  all 
of  the  mining  that  we  are  still  doing  there.  There  is  a  shortage  of  labor, 
but  if  the  men  work  steadily  we  have  enough  to  do  the  necessary  work. 

We  have  had  an  increase  in  freight  rates  on  the  railroads  not  classed 
as  interstate  roads,  but  on  the  lower  grade  ores  they  did  not  take  advan- 
tage of  the  25  per  cent,  increase.  The  mills  are  making  the  same  charge 
that  they  did  before  the  war,  except  on  some  of  the  lower  grades  of  ore, 
and  they  have  reduced  the  cost  on  those.  One  plant  in  Cripple  Creek 
district  in  order  to  encourage  the  mining  of  the  lower  grade  ores  is 
treating  ore  at  cost.  A  miner  cannot  pay  high  prices  for  his  powder  or 
high  prices  for  the  coal  with  which  to  do  development  work. 

Ever-Increasing  Taxes 

We  have  suffered  from  the  increase  in  taxes — State,  county,  school  and 
national.  There  are  more  farmer  votes  in  the  State  of  Colorado  than  are 
cast  by  miners,  and  the  farmer  states  that  the  miner  should  pay  more 
and  the  farmer  less,  and  it  is  bothering  us  a  good  deal  now  to  meet  the 
effort  being  made  to  change  our  laws  and  make  the  producer  of  gold  pay 
the  taxes  for  the  rest  of  the  State. 

As  to  the  remedy  I  have  no  solution  to  offer.  I  think  that  the  miner, 
if  his  hours  are  to  be  changed  at  all,  ought  to  work  more  than  eight  hours 
instead  of  less.  I  think  that  we  all  ought  to  economize,  save,  do  away 
with  some  of  our  luxuries,  and  if  we  can  start  a  propaganda  throughout 
the  country  for  less  luxuries,  I  think  it  will  help  the  whole  situation.  We 
have  got  to  get  rid  of  the  radical,  the  "Red"  and  the  labor  organizations. 
We  had  all  of  that  in  Colorado  before  you  gentlemen  went  through  it. 
The  Western  Federation  of  Miners  had  a  very  fine  press  organization, 
which  spread  the  propaganda  throughout  the  country  in  those  days  to 
tell 'you  how  bad  the  Colorado  employer  was,  and  the  other  States  looked 
on  in  horror.  We  had  sufficient  good  Americans  to  get  rid  of  them  then 
and  we  have  had  no  trouble  on  this  coal  strike.  Now  the  rest  of  the 
States  are  starting  to  do  the  things  that  Colorado  did  15  years  ago  and 


THE  AMERICAN  MINING  CONGRESS  43 

that  you  looked  down  on  us  for  doing.    We  got  no  sympathy  then,  but 
the  others  are  now  inquiring  what  we  did  at  that  time. 

THE  CHAIRMAN:  There  are  gentlemen  here  from  all  sections  of 
the  United  States.  I  would  like  to  ask  Dr.  A.  T.  Roos,  of  South  Dakota, 
to  say  something  from  the  standpoint  of  the  miner,  particularly  the 
prospector. 

Lack  of  Government  Co-operation 

DR.  ROOS :  Mr.  Chairman,  Ladies  and  Gentlemen :  There  have  been 
a  great  many  points  mentioned,  particularly  from  the  economist's  view- 
point, but  the  one  feature  that  might  be  of  interest  is  the  history  of  this 
agitation. 

A  committee  was  sent  last  year  to  Washington  (from  Alaska,  I  think 
it  was),  stating  under  what  deplorable  conditions  the  gold  miners  and 
mining  interests  were  working,  and  was  practically  turned  down,  or  rather 
the  statement  was  made  that  under  the  existing  conditions  direct  remedies 
could  not  be  offered.  There  was  then  a  Congressional  committee  ap- 
pointed, with  Mr.  Baker  as  chairman,  and  this  committee  also  stated  that 
only  indirect  subsidies  could  be  advocated  for  the  reason  that  a  change 
of  standard  would  be  impossible  and  a  direct  bonus  was  not  looked  upon 
favorably. 

During  the  last  winter  some  of  the  large  producing  companies  intended 
to  advocate  improvements  in  their  conditions  by  asking  for  a  direct  bonus 
on  gold,  but  again  it  was  stated  that  the  plan  was  not  feasible.  Subse- 
quently the  Director  of  the  Bureau  of  Mines,  Dr.  Van  H.  Manning, 
stated  that  the  improvement  of  metallurgical  methods  in  the  treatment  of 
low  grade  and  complex  ores,  also  the  lowering  of  prices  for  material  and 
possibly  labor,  would  add  materially  in  adjusting  conditions.  In  the 
Black  Hills,  in  the  last  six  months  particularly,  the  Homestake  Mine  has 
been  running  under  reduced  tonnage  and  other  producers  were  forced  to 
suspend  operations  altogether. 

Miners  Seek  Higher  Wages 

The  decrease  in  output  at  the  Homestake  may  be  partially  accounted 
for  by  the  exodus  of  many  of  the  miners  to  the  copper  camps  in  Arizona 
and  Montana,  where  the  wages  were  $6.25  for  the  same  work  for  which 
the  company  was  able  to  pay  only  $4.25  on  account  of  the  prehistorically 
low  price  of  $20.67  per  ounce  of  gold. 

It  seems  to  be  the  general  impression  that  the  Homestake  and  other 
large  producers  will  not  be  able  to  continue  operations  and  pay  the  usual 
dividends  unless  a  direct  bonus  is  paid  on  newly  produced  gold.  And  I 
understand  from  the  statement  made  by  the  gentleman  from  Colorado 
that  the  conditions  are  the  same  there.  They  are  similar  in  California, 
Washington  and  other  parts  of  the  country. 

Prospecting  Suspended 

Now,  as  to  the  method  of  procedure  I  naturally  am  not  in  a  position  to 
propose  any  details.  This  should  be  entirely  left  to  committees  appointed 


44  REPORT  OF  PROCEEDINGS 

and  members  of  such  committees  who  can  specialize  on  the  economic  and 
legal  features  of  the  case.  One  thing  is  certain,  and  that  is  we  cannot  da 
any  prospecting  under  the  present  conditions.  We  want  to,  right  at  this 
Convention,  state  plainly  that  the  prospector  and  development  company 
cannot  continue  working  and  raise  sufficient  funds  for  their  work  unless 
the  producing  companies  can  show  profits  on  their  investment  in  the  form 
of  regular  dividends. 

It  has  been  stated  that  the  production  has  decreased  from  $90,000,000 
in  1916  to  $68,000,000  in  1918,  demonstrating  that  some  of  the  producing 
companies  cannot  keep  up  operations  and  consequently  prospecting  is  at 
a  standstill.  The  only  remedy  seems  to  be  a  direct  bonus  on  gold,  whether 
in  the  form  of  an  excise  tax  on  manufactured  jewelry  or  in  some  other 
form  to  be  worked  out  in  detail  by  properly  appointed  committees. 

In  addition  to  statements  made,  I  would  like  to  draw  attention  to  the 
fact  that  for  every  ton  of  ore  mined  another  ton  of  ore  must  be  found 
and  developed  in  order  to  maintain  a  safe  balance  in  production.  Gold 
mining  is  much  the  same  in  this  respect  as  coal  and  iron  mining,  and 
there  must  be  sufficient  funds  available  for  the  development  of  prospects 
and  these  cannot  be  raised  unless  a  better  price  than  heretofore  is  paid 
for  the  product. 

CHAIRMAN  SEAMAN:  I  would  like  to  ask  Mr.  Wells,  president  of 
The  American  Mining  Congress,  to  say  a  few  words  on  this  situation  in 
general. 

The  American  Gold  Conference 

MR.  WELLS:  Mr.  Chairman,  Ladies  and  Gentlemen:  I  do  not  want 
to  speak  to  you  as  president  of  the  Mining  Congress,  but  as  the  survivor 
of  The  American  Gold  Conference,  of  which  I  had  the  honor  and  mis- 
fortune to  be  chairman. 

I  suggested  to  your  chairman  that  if  I  should  outline  to  you  a  little 
briefly  the  work  that  The  American  Gold  Conference  attempted  to  do  and 
the  limitations  that  seem  to  be  put  upon  its  efforts,  you  might  be  better 
prepared  to  deal  with  the  situation  as  it  now  presents  itself. 

Most  of  you  know  that  we  organized  in  Nevada  last  August  what  is 
called  and  is  still  existing  The  American  Gold  Conference.  We  spent 
about  three  months  gathering  data  and  developing  charts  to  be  presented 
to  a  committee  of  the  Treasury  Department  which  had  been  appointed  by 
Secretary  McAdoo  to  study  the  situation  and  hold  a  hearing.  Our  statis- 
tics and  charts  demonstrated  beyond  argument  the  conditions  which  all  of 
you,  as  gold  producers,  recognize,  although  painfully.  The  time  occupied 
in  preparing  ourselves  for  the  hearing  in  Washington  carried  us  by  the 
day  of  the  Armistice,  and  consequently  the  conditions  which  had  given 
the  Government  concern  with  respect  to  its  gold  reserve  had  apparently 
passed. 

Objected  to  Bonus 

Probably  most  of  you  saw  the  report  of  the  Treasury  Department 
Committee,  which  in  effect  said  that,  while  recognizing  the  plight  of  the 


THE  AMERICAN  MINING  CONGRESS  45 

gold  producers  and  being  well  informed  as  to  the  large  decrease  in  the 
production  of  gold  which  necessarily  followed  the  conditions  surrounding 
gold  mining,  the  committee  felt  that  no  bonus,  no  relief  of  any  tangible 
sort,  could  be  developed. 

In  addition,  I  talked  to  a  good  many  of  the  bankers  in  New  York,  some 
of  whom  are  my  friends  and  I  am  sure  talked  sincerely  and  frankly,  and 
it  was  made  evident  to  me  that  there  really  was  no  urgent  need  of  gold 
for  purposes  of  supporting  the  governmental  credits.  There  would  have 
been  unquestionably  had  the  war  continued  for  any  length  of  time  beyond 
the  date  of  the  Armistice,  but  we  were  unfortunate  in  arriving  perhaps 
too  late.  In  all  events,  the  critical  period  had  then  passed,  and  no  atten- 
tion has  been  given,  I  think,  since  then  by  the  Government  to  the  possible 
need  of  additional  gold. 

Recently,  however,  it  has  been  pointed  out  to  Government  officials 
that  the  consumption  of  gold  in  the  arts,  jeweler's  trade  and  so  on  is  so 
large  as  to  probably  exceed  what  has  now  come  to  be  the  annual  produc- 
tion of  gold  in  this  country.  Consequently,  we  have  a  new  argument  and 
a  new  point  of  attack,  and  it  is  upon  that  basis  that  Mr.  Lawrie  has 
developed  a  recommendation  with  respect  to  possible  relief  for  gold  pro- 
ducers. He  will  tell  you  of  this  in  detail,  but  I  thought  perhaps  it  would 
be  well  to  inform  you  of  the  steps  we  went  through  in  The  American  Gold 
Conference  so  that  you  would  understand  that  we  were  not  entirely  in- 
active, but  we  met  obstacles  which  made  it  impossible  to  accomplish  any- 
thing for  you  or  ourselves. 

Must  Plan  Carefully 

I  think  that  conditions  have  changed  and  that  possibly  now  something 
can  be  done.  It  must,  however,  be  a  very  well  considered  plan  and  it 
ought,  in  advance,  to  have  the  approval  of  some  of  the  others  interested 
in  the  use  of  gold  as  a  support  of  credit.  Unless  we  go  to  Washington,  to 
Congress,  to  the  Government,  with  such  support  as  that,  we  will  not  get 
very  far,  so  we  ought  first  to  assure  ourselves  of  the  plan  that  we  believe 
sound  and  reasonable,  necessary  to  enable  the  gold  mining  industry  to 
continue,  and  then  we  ought  to  present  it  to  those  whom  I  suggested 
should  be  associated  with  us.  We  can  then  go  to  Washington  with  hope 
of  results. 

Telegram  from  John  Clausen 

I  have  here  a  telegram  from  Mr.  Clausen,  vice-president  of  the  Chemical 
National  Bank  of  New  York,  in  which  he  says: 

It  would  seem  very  important,  not  only  on  account  of  our 
internal  economic  position  but  also  because  of  our  position  in 
international  trade,  to  protect  the  monetary  gold  reserve  of  the 
United  States  from  excessive  withdrawals  for  other  than  mone- 
tary uses.  Statistics  of  this  year  indicate  that  consumption  in 
arts  and  trades  will  exceed  the  production  of  new  gold  in  this 
country.  I  have  given  study  to  the  proposal  made  by  H.  N. 
-  Lawrie  to  create  a  fund  by  imposing  an  excise  upon  the  manufac- 
ture and  sale  of  gold  used  for  other  than  monetary  purposes 


46  REPORT  OF  PROCEEDINGS 

which  could  be  utilized  as  a  bonus  to  producers  of  new  gold  in 
order  to  stimulate  production.  His  plan  would  seem  a  practicable 
solution  of  the  complex  problem  with  which  the  gold  industry  is 
now  confronted,  since  it  eliminates  monetary  entanglements  and 
reduces  the  subject  to  the  sale  of  gold  as  a  commodity.  It  would 
seem  that  such  stimulation  of  the  gold-mining  industry  would 
insure  a  sufficient  supply  to  the  trades  and  at  the  same  time  pro- 
tect the  monetary  reserve  from  excessive  withdrawals  for  other 
than  monetary  purposes.  I  exceedingly  regret  that  illness  pre- 
vents my  attending  your  important  meetings.  Best  wishes  for  a 
successful  Convention. 

Now,  those  are  good,  sound  words  from  a  man  who  is  thoroughly  sound 
in  regard  to  the  momentary  aspects  of  this  question.  I  think  it  is  a  most 
comforting  message,  and  it  gives  us  good  foundation  for  believing  that  the 
plan  which  Mr.  Lawrie  will  explain  to  you  will  be  expected  to  meet  with 
the  approval  of  bankers,  and  I  assure  you  that  if  it  does  not  you  are 
going  to  waste  your  time  going  to  Washington  with  a  resolution,  and  so 
this  is  particularly  encouraging  to  me.  I  thank  you.  [Applause.] 

A  Solution  of  the  Complex  Gold  Problem 

CHAIRMAN  SEAMAN:  Mr.  Lawrie  was  scheduled  to  present  his 
discussion  at  a  later  meeting  of  this  Conference,  but  in  view  of  the  fact 
that  the  subject  matter  of  his  address  should  really  be  before  us  for  con- 
sideration, I  will  ask  Mr.  Lawrie  if  he  will  not  present  it  to  us  now. 

(Mr.  H.  N.  Lawrie's  address  will  appear  on  page  526.) 

CHAIRMAN  SEAMAN :  Gentlemen,  the  gold-mining  industry  is  cer- 
tainly under  tremendous  obligations  to  Mr.  Lawrie  for  his  splendid  pres- 
entation of  his  solution.  We  are  here  for  a  business  purpose.  We  are 
here  for  the  necessity  of  our  industry.  To  continue,  we  must  do  some- 
thing. 

I  believe  our  first  duty  is  to  appoint  a  Committee  on  Resolutions.  Mr. 
Lawrie  has  gotten  together  the  only  constructive  method  for  allowing  our 
industry  to  live.  At  least  it  is  the  only  one  that  has  come  to  our  notice 
that  has  value  in  it.  I  believe  we  should  appoint  a  Committee  on  Reso- 
lutions, which  will  then  present  the  resolution  to  the  Mining  Congress  for 
its  endorsement.  What  is  your  pleasure? 

MR.  E.  P.  MATHEWSON :  Mr.  Chairman,  Ladies  and  Gentlemen :  I 
left  this  room  rather  hurriedly  on  account  of  the  character  of  the  talk 
that  was  being  made  from  this  platform.  I  realized  that  we  were  getting 
on  the  wrong  track  and  very  seriously,  and  I  went  out  for  help.  I  know 
if  you  take  a  dollar  bill  and  tear  it  in  two  you  have  not  two  dollars.  The 
argument  set  forth  is  along  those  lines.  It  is  like  the  man  whose  house  is 
on  fire  and  he  grabs  gasoline  to  put  it  out. 

I  was  trying  to  get  an  economist  to  come  up  here  and  explain  to  you  why 
you  are  on  the  wrong  track.  I  cannot  go  into  those  details,  but  I  want  to 
ask  a  favor  of  you — that  you  will  not  appoint  a  Committee  on  Resolutions 
until  I  can  get  this  gentleman  to  appear  before  you  at  the  next  meeting 
of  the  Gold  Conference  and  explain  the  true  economics  of  the  gold  question. 

The  gentleman  I  have  in  mind    (I   cannot  give  his  name  because   I 


THE  AMERICAN  MINING  CONGRESS  47 

haven't  his  permission)  is  one  of  the  most  famous  economists  in  the  world 
and  he  lives  here  in  St.  Louis.  I  have  been  to  his  office,  but  he  has  gone 
for  the  day. 

CHAIRMAN  SEAMAN:  Surely  Mr.  Mathewson's  position  in  the 
mining  world  entitles  his  views  to  consideration.  If  we  are  on  the  wrong 
track  and  before  a  committee  is  appointed,  we  should  hear  such  construc- 
tive recommendations  that  will  afford  relief.  I  think  that  is  essential  and 
necessary.  There  is  a  set  program  announced  for  this  Conference,  Mr. 
Mathewson.  We  meet  here  Wednesday,  that  is  tomorrow,  at  the  Hotel 
Statler,  at  2  o'clock  P.  M.  However,  I  personally  do  not  see  any  reason 
why  we  should  not  appoint  a  Committee  on  Resolutions,  which  can  be  con- 
sidering this  situation.  We  certainly  are  here  for  a  business  purpose 
and  our  matters  must  be  reduced  to  a  concrete  statement  as  to  what  we 
want.  I  personally  think  we  should  appoint  the  committee,  which  can  con- 
sider this,  but  they  do  not  need  to  report  until  after  they  have  heard 
what  your  friend  has  to  say. 

MR.  MATHEWSON:     That  is  entirely  satisfactory  to  me. 

MR.  WELLS:  I  concur  in  your  view,  Mr.  Chairman,  that  we  had 
better  proceed  to  accomplish  something  through  such  a  committee,  which 
may  busy  itself  with  discussion,  giving  new  consideration  to  the  objection 
raised  by  Mr.  Mathewson,  and  naturally  not  presenting  resolutions 
until  this  Conference  has  heard,  if  it  be  possible,  the  arguments  of  the 
economist  Mr.  Mathewson  referred  to.  I  therefore  move  that  the  chair- 
man appoint  a  committee  of  three  on  resolutions  and  recommendations 
to  report  to  this  Conference. 

(Motion  duly  seconded,  put  and  carried.) 

Committee  on  Resolutions 

CHAIRMAN  SEAMAN:  The  Chair  will  appoint  as  such  Committee 
on  Resolutions,  Gibson  Berry,  R.  M.  Betts  and  George  M.  Taylor. 

MR.  GEORGE  M.  TAYLOR:  I  would  like  to  have  Mr.  Arthur,  from 
Cripple  Creek,  appointed  in  my  place. 

CHAIRMAN  SEAMAN:  The  chairman  of  this  committee  will,  of 
course,  have  the  assistance  and  advice  from  all  sides  of  the  question.  Those 
of  us  who  have  given  this  any  consideration  will  be  glad  to  be  at  the 
beck  and  call  of  this  committee  if  they  need  us.  I  would  like  very  much 
to  have  Mr.  Mathewson's  ideas  presented.  I  am  a  little  in  the  dark  as  to 
what  they  are,  and  I  would  be  glad  to  have  this  committee  call  Mr. 
Mathewson,  or  make  him  a  member,  or  at  least  let  him  impress  his  views 
on  the  committee. 

Favored  Bimetallism 

MR.  H.  O.  GRANBERG:  I  have  listened  with  a  great  deal  of  interest 
to  the  remarks  of  Mr.  Lawrie,  and  it  occurs  to  me  that  an  excise  tax  on 
gold  to  be  used  in  the  arts  does  not  seem  to  be  the  proper  method  to  in- 
crease the  production  of  gold.  I  am  unable  to  see  it  in  that  light,  but  I 
am  willing  to  learn  as  a  matter  of  information.  It  may  benefit  the  present 


48  REPORT  OF  PROCEEDINGS 

gold  miner  or  it  might  strengthen  the  gold  standard  as  a  monetary  unit, 
but  it  will  only  shift  the  burden  of  this  proposed  excise  tax  on  those  who 
use  it  in  the  arts.  I  cannot  see  how  it  will  either  stimulate  or  increase 
the  gold  production.  The  decrease  of  gold  production  threatens  to  become 
a  national  calamity.  Great  Britain,  who  is  the  next  largest  producer  of 
gold,  is  decreasing  its  production  in  South  Africa  in  even  a  greater  ratio 
than  is  the  United  States.  Their  deposits  dip  incliningly  deeper  and 
deeper  into  the  ocean  until  it  becomes  more  difficult  and  more  expensive 
to  mine  it. 

Is  there  not  some  better  way  to  remedy  this  trouble?  Would  not  the 
bimetallic  uses  of  both  gold  and  silver  tend  to  stabilize  the  value  of  both 
by  specie  money?  Silver  has  been  increasing  very  steadily  in  value  until 
it  exceeds  the  coinage  value,  while  gold  remains  stationary  and  fixed.  It 
certainly  offers  a  more  practical  and  simpler  solution  without  harm  to 
anyone,  and  would,  in  my  candid  opinion,  greatly  stimulate  the  mining 
industry  in  all  its  various  metallic  productions,  especially  of  gold  and 
silver,  but  as  these  metals  occur  associated  with  so  many  other  metals  it 
would  tend  to  stimulate,  the  whole  mining  industry.  How  would  the  use 
of  platinum  for  coinage  affect  us,  as  its  value  is  five  times  more  valuable 
than  gold  and  there  are  many  places  where  this  metal  is  found  and  it 
might  lead  to  greatly  increased  production?  These  things  might  be  well 
to  consider.  The  platinum  production  in  this  country  could  be  stimulated. 
The  mineral  occurs  in  many  places,  and  if  found  in  more  liberal  quantities 
might  be  used  for  money  the  same  as  it  is  used  in  Russia,  where  it  is 
mined  in  considerable  quantity. 

Limited  Platinum  Supply 

CHAIRMAN  SEAMAN:  Are  you  acquainted  with  the  production  of 
platinum — as  to  the  amount  produced? 

MR.  GRANBERG:  I  wish  to  gain  information  and  see  if  there  is 
not  some  other  way  to  remedy  this  dilemma  that  we  are  in  at  the  present 
time,  and  I  may  speak  again  on  this  subject,  but  those  are  points  I  think 
ought  to  be  considered  in  this  connection. 

CHAIRMAN  SEAMAN:  I  suppose  you  are  aware  that  on  account  of 
the  tremendous  value  of  platinum — $105  an  ounce — every  possible  effort 
is  made  by  the  producers  to  increase  the  supply,  and  the  supply  so  far 
found  is  extremely  limited.  In  looking  up  the  platinum  situation,  I  find 
that  the  total  produced  is  extremely  small. 

Are  there  any  further  remarks  before  we  adjourn? 

DR.  ROOS :  I  would  like  to  ask  a  question.  If,  for  instance,  we  should 
be  able  to  get  this  bonus  of  $10,  what  is  the  opinion  on  the  increase  in 
the  next  five  years?  What  is  the  estimate  of  the  total  gold  production  for 
the  next  five  years? 

MR.  LAWRIE :  It  would  be  impossible  to  make  such  estimate,  because 
economic  conditions  are  going  to  be  subjected  to  some  change.  The  gen- 
tleman has  raised  a  point  that  I  have  attempted  to  show,  by  the  action 
«f  the  American  Bankers  and  the  opinion  of  Mr.  Clausen,  that  it  is 


THE  AMERICAN  MINING  CONGRESS  49 

essential  that  we  maintain  that  production.  Of  course,  there  is  some 
idea  that  we  have  a  tremendous  volume  of  gold,  but  we  are  merely  the 
custodians  of  that  supply  and  it  must  find  its  way  into  those  foreign 
reserves  in  order  that  our  export  business  be  maintained,  and  the  pros- 
perity of  the  United  States  is  very  largely  dependent  upon  the  volume 
of  our  export  business. 

CHAIRMAN  SEAMAN:    Are  there  any  further  remarks? 

MR.  WELLS :  What  sort  of  solution  have  you  for  the  possible  import- 
ing of  gold  for  the  jewelry  trade? 

Tax  on  Gold 

MR.  LAWRIE:,  In  reply  to  that  question,  I  will  say  that  the  tax 
being  placed  on  the  manufactured  product  relieves  us  of  further  con- 
sideration as  to  the  source.  It  may  come  from  melting  coins,  it  may 
come  from  melting  old  jewelry.  It  makes  no  difference;  the  tax  is  col- 
lectible on  the  finished  product  and  it  is  just  to  our  trade  consumer  in 
this  country,  because  the  foreign  manufacturer  would  have  to  pay  the 
same  tax  provided  he  sold  jewelry  in  this  market.  If  he  exports  to  foreign 
markets,  the  excise  would  have  to  be  paid. 

MR.  WELLS :  I  asked  the  question  because  I  did  not  think  you  had 
expressed  it  to  this  Conference. 

DR.  ROOS:  The  reason  why  I  asked  the  question  is  this:  We  have 
in  our  district  properties  laying  idle  for  the  last  25  years  and  others 
forced  to  suspend  operations  recently.  Many  of  these  properties  were 
forced  to  cease  operations  because  they  could  not  produce  gold  at  the 
existing  market  price.  Is  gold  to  be  considered  an  essential  or  necessity 
is  now  the  paramount  issue.  I  believe  that  we  can  produce  50  per  cent, 
more  gold  in  the  Black  Hills  in  actual  bullion  in  the  course  of  two  or 
three  years  after  establishing  the  bonus  of  $10.  Is  there  any  other  metal 
or  system  of  credit  which  could  take  the  place  of  gold  as  a  measure  of 
value  and  standard  of  value?  If  there  is,  we  want  to  know  it  now  and 
not  ten  years  from  now. 

If  gold  is  to  be  considered  an  essential,  we  will  have  to  receive  more 
than  $20.67  per  ounce,  as  I  believe  that  this  Conference  has  positively 
demonstrated  that  the  production  of  gold  at  the  figures  established  arbi- 
trarily in  1812  is  not  practicable  under  the  present  conditions. 

Must  Maintain  Gold  Standard 

CHAIRMAN  SEAMAN :  I  do  not  believe  it  is  in  the  mind  of  any  of 
the  people  here  that  the  gold  producer  wants  in  any  way  to  change  the 
gold  standard.  I  believe  everyone  here  believes  thoroughly  that  we  must 
exercise  every  effort  to  maintain  the  gold  standard.  By  this  proposal 
Mr.  Lawrie  does  not  mean  that  we  are  to  change  the  gold  standard  or 
change  the  value  of  the  gold.  It  is  simply  what  they  are  doing  to  produce 
other  things  to  meet  an  absolute  demand.  There  will  be  no  gold  pro- 
duced until  something  is  done  to  stimulate  the  production  and  maintain  it. 

If  there  are  no  further  remarks,  the  meeting  will  stand  adjourned  until 
tomorrow  afternoon  at  2  o'clock. 


50  REPORT  OF  PROCEEDINGS 


SECOND  SESSION— WEDNESDAY  AFTERNOON 

The  National  Gold  Conference  convened  at  2.30  P.  M.  in  the  Hotel 
Statler,  Mr.  Seaman  presiding. 

The  Government  and  the  Gold  Producer 

Mr.  Lawrie  stated  that  Mr.  Eugene  Davis,  president  of  the  Eureka- 
Croesus  Mining  Company,  of  Eureka,  Nevada,  had  been  unexpectedly 
detained  from  attending  the  meeting,  but  had  forwarded  his  address, 
"The  Government  and  the  Gold  Producer,"  with  the  request  that  the  same 
be  read.  Mr.  Lawrie  read  the  address,  which  appears  on  page  544. 

CHAIRMAN  SEAMAN:  Gentlemen,  I  think  we  will  all  agree  that 
that  is  a  splendid  presentation  of  the  case.  Do  we  have  any  other  papers 
here? 

MR.  LAWRIE :  Mr.  Fletcher  Hamilton,  head  of  the  California  Bureau 
of  Mines,  wishes  to  speak  a  few  words. 

CHAIRMAN  SEAMAN:    We  will  be  glad  to  hear  from  Mr.  Hamilton. 

MR.  HAMILTON:  Mr.  Seaman  and  Gentlemen  of  the  Gold  Con- 
ference: This  morning  I  started  to  go  up  to  my  room  and  write  an 
article  on  quicksilver,  but  this  Gold  Conference  was  so  much  on  my  mind 
that  I  could  not  get  it  out.  In  attending  the  meeting  yesterday  and 
talking  to  Mr.  Lawrie  on  this  subject,  a  few  thoughts  occurred  to  me  that 
I  consider  might  be  worth  presenting,  inasmuch  as  I  think  all  should 
give  their  best  efforts  to  this  great  problem  before  us.  I  take  it  for 
granted  that  these  thoughts  are  familiar  to  all  of  you,  suggesting  a 
solution  which  I  hope  might  aid  to  help  the  situation. 

The  world  is  not  ready  to  change  the  standard  value  of  gold  as  fixed 
by  its  use  as  a  basis  of  finance,  nor  do  I  believe  such  a  procedure  would 
be  economically  sound. 

Foundation  of  World  Finance 

Perhaps  we  all  do  not  fully  realize  that  gold  is  performing  two  func- 
tions. First,  it  is  the  base  and  foundation  of  world  finance,  with  a  fixed 
value  of  $20.67  per  ounce,  under  which  function  it  is  not  a  commodity. 
Second,  it  is  a  useful  metal  in  the  arts  and  industries,  under  which  function 
it  is  a  commodity,  and  its  value  under  this  function  should  be  determined 
by  the  inevitable  law  of  supply  and  demand. 

We  have  all  been  laboring  under  the  delusion,  perhaps,  that  the  Gov- 
ernment is  the  final  purchaser  of  all  gold  produced,  or  at  least  that  it  goes 
through  their  hands  at  some  time.  There  may  be  those  here  who  realize 
that  this  is  not  the  fact.  At  the  present  time  brokers  are  buying  bullion 
at  standard  valuation  and  selling  to  outside  markets  at  a  premium.  These 
dealers,  therefore,  do  not  want  the  present  order  of  things  changed;  do 
not  want  the  gold  miner  to  obtain  his  just  relief. 


THE  AMERICAN  MINING  CONGRESS  51 

Government  Shows  No  Concern 

The  Government  has  shown  no  particular  concern  over  the  precarious 
status  of  the  gold  miner,  nor  of  the  fact  that  a  rapidly  declining  production 
is  being  recorded.  Our  only  assumption,  then,  can  be  that  the  Govern- 
ment is  satisfied  with  its  gold  reserves,  and  therefore  the  gold  industry 
must  look  to  its  second  function  for  relief — namely,  that  of  an  industrial 
metal. 

In  doing  this  why  should  we  look  to  the  Government  to  act  as  our 
selling  agent,  with  its  intricacies  of  tax  and  inspection  of  checking  and 
auditing?  It  seems  to  me  that  the  industry  itself  can  provide  the  means 
of  marketing  its  product  and  should  properly  do  this  very  thing. 

i 

Drastic  Regulation  Needed 

I  would  suggest  that  this  plan  of  action  can  be  accomplished : 

First — By  enacting  strict  and  drastic  legislation  against  the  melting  or 
mutilating  of  coins. 

Second — By  enacting  legislation  which  would  restrict  the  Government 
to  the  sole  role  of  a  purchaser  of  gold,  such  gold  to  be  used  for  monetary 
or  coinage  purposes,  but  further  than  that  give  the  Government  the  pref- 
erential right  of  purchase,  at  the  standard  value  of  $20.67  per  ounce,  to 
the  ultimate  amount  of  its  needs  and  even  to  the  total  amount  of  produc- 
tion, also  making  it  obligatory  upon  the  Government,  as  today,  to  pur- 
chase all  gold  offered  at  $20.67  per  ounce. 

Third — Enact  legislation  prohibiting  the  importation  of  industrial  gold. 

Government  Could  Control 

The  Government  will  then  be  able,  at  all  times,  to  control  any  unjust 
attempt  at  manipulation  of  prices  asked  for  industrial  gold,  by  merely 
exercising  its  priority  right  of  purchase  at  the  standard  value  of  $20.67 
per  ounce. 

The  gold-mining  industry  could  then  proceed  with  the  knowledge  that 
it  enjoyed  that  incontestable  right  given  to  every  other  business — the 
right  to  fight  for  its  existence  under  conditions  which  at  least  allow  of 
some  flexibility  in  the  ultimate  price  of  its  commodity. 

Resolutions  Committee  Report 

MR.  BETTS:  Your  Resolutions  Committee  has  formulated  a  resolu- 
tion that  we  would  like  to  present  to  the  Conference  for  discussion  at 
this  time. 

Mr.  Betts  read  the  following  resolution: 

WHEREAS,  The  gold  production  of  the  United  States,  which 
declined  so  rapidly  during  the  war  period,  has,  since  the  signing 
of  the  Armistice,  still  further  declined  because  of  the  extreme 
economic  pressure  to  which  the  gold-mining  industry  has  been 
subjected;  and 

WHEREAS,  Gold  is  a  standard  of  value  and  the  basis  of  all 
credit  and  it  is  vitally  important  to  the  financial  and  commercial 
life  of  the  nation  that  the  monetary  reserve  be  protected ;  and 


52  REPORT  OF  PROCEEDINGS 

WHEREAS,  There  is  now  being  used  in  the  arts  and  manufac- 
tures of  the  United  States  more  gold  than  the  annual  domestic 
production  which  is  obtained  under  our  present  system  from  the 
Treasury  of  the  United  States  at  a  net  cost  of  $20.67  per  ounce 
of  gold;  and 

WHEREAS,  The  actual  cost  of  mining  and  producing  gold  now 
far  exceeds  this  amount  and  many  gold  mines  have  necessarily 
ceased  production  and  other  mines  in  the  United  States,  almost 
without  exception,  will  be  compelled  to  shut  down  and  suspend 
their  mining  operations  unless  relief  can  be  provided  for  the 
present  serious  situation  in  the  gold-mining  industry;  and 

WHEREAS,  It  is  the  opinion  and  purpose  of  this  Congress  that 
no  change  should  be  made  in  the  present  gold  standard  and  unit 
of  value  for  the  monetary  transaction  of  this  and  other  civilized 
countries,  and  that  no  legislation  should  be  had  that  would  in 
any  way  invalidate  the  obligation  of  contracts  as  now  existing; 
now,  therefore,  be  it 

Resolved  by  The  American  Mining  Congress  in  its  Twenty- 
second  Annual  Convention  in  the  city  of  St.  Louis,  Mo.,  That  the 
Congress  of  the  United  States  be  and  it  is  hereby  earnestly 
petitioned  to  pass  such  speedy  and  remedial  legislation  as  shall 
provide  the  necessary  relief  that  for  a  period  of  five  years  from 
and  after  the  passage  of  such  legislation  there  shall  be  paid  to 
every  person  producing  gold  from  the  mines  within  the  United 
States  and  its  possessions  under  such  terms  and  conditions  as 
may  properly  be  provided  a  premium  of  ten  ($10)  dollars  per 
fine  ounce  of  such  gold  so  hereafter  produced;  said  payments  to 
be  made  out  of  funds  to  be  provided  by  an  excise  of  ten  ($10) 
dollars  per  ounce  on  the  use,  manufacture  or  sale  of  gold  in  the 
United  States  for  other  than  coinage  or  monetary  purposes  and 
from  other  funds  in  the  Treasury  of  the  United  States  not  re- 
quired for  specific  purposes;  and  it  is 

Further  Resolved,  That  after  five  years  from  the  passage 
of  such  legislation  the  premium  and  excise  so  to  be  provided  shall 
be  adjusted  in  accordance  with  the  rise  or  fall  in  commodity 
prices  as  compared  with  the  average  for  the  five-year  period 
herein  referred  to;  this  readjustment  and  excise  can  be  aban- 
doned on  account  of  the  restoration  of  a  price  level  which  will 
satisfactorily  maintain  the  normal  production  of  new  gold  in  the 
United  States  to  meet  all  industrial  requirements  of  the  arts  and 
trades. 

Analysis  of  Resolution 

CHAIRMAN  SEAMAN:     Are  there  any  remarks  on  this  resolution? 

I  was  honored  in  taking  some  part  in  preparing  this  resolution,  adopt- 
ing as  it  does  the  general  plan  outlined  and  explained  to  us  so  fully  by 
Mr.  Lawrie,  and  in  doing  so  we  have  endeavored  to  cover  present  condi- 
tions. We  have  tried  to  place  in  the  first  rank  the  national  importance 
of  this  problem  and  in  the  last  place  the  importance  of  the  industry  itself 
to  our  country  and  to  those  engaged  in  its  operation  as  well. 

You  may  not  have  received  an  analysis  of  the  resolution,  therefore  I 
beg  your  indulgence  while  I  attempt  to  explain  briefly  some  of  its  salient 
features.  In  the  first  place,  the  committee  has  adopted  practically  the 
same  "whereas"  or  preamble  adopted  at  the  recent  meeting  of  the  Ameri- 
can Bankers'  Association,  which  recites  the  fact  that  there  has  been  an 
alarming  decrease  in  the  last  two  or  three  years  in  the  production  of 
American  gold.  Secondly,  that  the  maintenance  of  the  production  of 


THE  AMERICAN  MINING  CONGRESS  53 

American  gold  is  of  vital  importance  in  order  that  we  may  uphold  the 
monetary  reserve  of  the  nation,  and  in  order  to  continue  to  form  a  proper 
and  adequate  basis  of  credit  for  the  financial  transactions  of  this  and 
other  countries.  Those  are  the  first  two  "whereases"  to  the  resolution, 
and  they  take  a  rather  broad  view  of  the  problem. 

There  is  another  "whereas,"  the  third  one,  that  recites  that  within  the 
last  year  or  two  the  use  of  gold  in  the  arts  and  American  manufactures 
has  so  far  increased  that  now  that  use  is  larger  than  the  production  of 
gold  in  America,  figures  of  Mr.  Lawrie  showing  us  that  during  the  cur- 
rent year  there  will  practically  be  used  in  the  arts  and  sciences  some 
$65,000,000  of  gold,  whereas  the  American  production  this  year  has 
declined  from  $98,000,000  to  about  $55,000,000  (estimated  for  the  present 
year) .  Therefore,  the  arts  and  industries  in  this  country  are  using  now, 
in  gold,  something  like  $10,000,000  or  $15,000,000  more  than  our  produc- 
tion in  new  gold.  The  third  "whereas"  recognizes  the  fact  that  inasmuch 
as  the  use  of  gold  in  the  United  States  for  other  than  coinage  purposes 
exceeds  to  a  great  extent  the  production,  there  is  nothing  left  for  coinage 
purposes. 

Jewelers'  Profit  from  Fixed  Price 

Then  the  fourth  preamble  recites  the  fact  that  these  American  manu- 
facturers using  gold  obtain  it  from  the  Treasury  at  $20.67  per  ounce, 
whereas  it  costs  more  than  that  to  produce  it  at  the  present  time,  and  by 
reason  of  this  fact  many  of  the  mines  of  the  country  have  already  shut 
down,  accounting  for  the  decline  in  production,  and  unless  some  relief  is 
afforded  it  will  follow  that  in  a  very  short  period  of  time  the  production 
of  gold  in  the  United  States  must  be  practically  suspended,  due  to  the 
fact  that  it  cannot  be  produced  for  what  it  brings  in  the  market.  Those 
living  in  the  gold  industry  countries  know  that  some  speedy  relief  must 
be  had. 

'Then  the  resolution  follows,  assuming  it  of  course  to  be  a  resolution 
of  The  American  Mining  Congress.  The  method  of  procedure  will  have 
to  be  taken  care  of.  Fortunately  we  have  this  Conference  to  shape  the 
matter  as  best  we  can.  If  we  succeed  in  passing  this  resolution  here,  our 
Resolutions  Committee,  or  the  officers,  will  have  to  take  it  over  to  The 
American  Mining  Congress,  where  it  will  be  introduced,  with  the  backing 
of  this  Conference.  It  will  then  be  referred  to  the  General  Committee  on 
Resolutions  after  being  read  from  the  desk  in  the  Mining  Congress.  It 
will  be  very  important  for  this  Association  to  be  represented  there.  Of 
course,  our  Committee  on  Resolutions  should  be  there.  Mr.  Lawrie  by  all 
means  must  be  there,  because  his  broad  knowledge  of  the  subject  will 
make  it  imperative. 

If  we  pass  this  resolution  at  this  afternoon's  session,  we  will  present  it 
tomorrow.  If  this  resolution  then  passes,  it  will  be  necessary  to  back  it 
up  before  Congress. 

Now,  the  resolution  which  follows  this  preamble  is  to  the  effect  that 
The  American  Mining  Congress,  at  its  annual  meeting,  earnestly  peti- 
tions the  Congress  of  the  United  States  to  pass  speedily  such  remedial 


54  REPORT  OF  PROCEEDINGS 

legislation  as  will  provide  for  two  things:  First — the  payment  to  the 
producer  of  new  gold  in  the  United  States  of  a  premium  of  $10  per  ounce 
over  the  present  price  of  $20.67,  and  that  this  shall  be  provided  for  in 
whole  or  in  part  out  of  a  fund  to  be  provided  by  an  excise  tax  of  $10 
per  ounce  to  be  placed  upon  all  gold  used  in  jewelry,  either  in  selling  or 
manufacturing,  or  other  of  the  arts  or  trades  where  gold  is  used  in  the 
United  States;  and  in  the  next  place,  that  at  the  end  of  five  years  such 
readjustments  of  the  premium  be  made  as  will  be  necessary,  by  reason 
of  the  advance  or  fall  in  commodity  prices,  as  will  continue  to  keep  the 
industry  alive  until  such  time  as  normal  conditions  may  restore  it  to 
a  place  where  legislative  aid  will  no  longer  be  needed.  That  is  the  sub- 
stance of  the  resolution. 

Perhaps,  now  that  I  am  on  my  feet,  you  will  allow  me  to  take  a  little 
more  of  your  time.  I  most  heartily  concur  in  what  has  been  worked 
out  by  this  committee.  I  think  we  are  extremely  fortunate,  on  the  occa- 
sion of  this  Conference,  in  having  the  services  of  Mr.  Lawrie,  who  cer- 
tainly has  gone  to  the  bottom  of  this  great  and  complicated  question. 

Don't  Blame  Commercial  Buyer 

It  is  said  that  bonuses  are  unpopular,  and  as  a  legislative  principle 
I  do  not  believe  in  them,  but  it  ought  not  to  take  more  than  a  school 
child's  knowledge  of  finance  to  know  that  the  Government  is  related  to 
gold  in  a  different  way  from  which  it  is  related  to  the  other  industries 
of  this  country.  The  Government,  by  making  the  gold  dollar  a  legal 
tender,  has  absolutely  fixed  the  price  of  gold;  by  virtually  adopting  gold 
as  a  standard  of  money  and  by  virtually  saying  how  much  gold  shall 
be  in  a  gold  dollar,  has  fixed  the  price  of  gold  to  the  producer,  because 
as  long  as  a  man  can  melt  his  dollars  into  bars  there  is  no  reason  why 
he  should  pay  the  producer. 

Now,  those  of  us  who  believe  in  conservative  advancement  feel  that 
the  gold  standard  is  the  standard  of  civilized  countries.  None  of  us 
believe  that  it  would  be  wise,  or  any  less  than  disastrous,  to  undertake 
to  change  the  American  standard.  All  of  this  vast  issue  of  Government 
bonds,  the  issues  of  municipal,  industrial,  and  mortgage  bonds  of  all 
kinds,  are  to  be  paid  in  gold.  Indeed,  so  intimately  is  the  standard  of 
the  American  gold  dollar  (25 8Ao  grains  of  gold  and  10  per  cent,  alloy) 
associated  with  every  contract  that  any  effort  to  upset  it  would  bring 
on  a  financial  panic  that  none  of  us  could  endure;  and,  therefore,  I 
think  it  is  extremely  important  that  this  Conference  of  gold  mining 
men  clearly  declare  their  loyalty  to  this  standard. 

Responsibility  on  Government 

On  the  other  hand,  it  is  apparent  (and  we  have  heard  the  statement 
of  a  distinguished  economist) ,  it  seems  to  me  self-evident,  that  since  the 
Government  is  responsible  for  fixing  this  stable  value  on  the  miners  of 
gold  so  that  it  is  impossible  for  it  to  go  up  or  down  with  the  rise  and 
fall  of  other  commodities,  the  liability,  the  responsibility  is  upon  the 
Government,  in  the  first  instance,  to  right  that  wrong.  It  has  practically 


THE  AMERICAN  MINING  CONGRESS  55 

removed  from  the  American  producer  of  gold  the  possibility  of  operating 
without  a  loss.  If  the  Government  during  a  stress  of  this  sort,  instead 
of  taking  over  the  mines  and  attempting  to  produce  the  gold  required 
for  the  currency  basis  of  the  country,  should  say  it  would  pay  a  $10  bonus 
to  help  those  who  produce  it,  the  Government  would  become  a  partner 
in  producing  what  it  must  absolutely  have.  It  would  be  perfectly  legiti- 
mate. It  would  meet  an  emergency  due  to  the  war. 

And  so  I  state,  it  does  not  matter  how  distinguished  an  economist 
may  be,  it  is  perfectly  self-evident  that  when  he  states  that  the  Govern- 
ment is  not  related  to  gold  any  more  than  it  is  to  other  commodities, 
he  overlooks  the  intelligence  of  the  ordinary  person.  Now,  it  is  up  to 
the  Government  to  maintain  this  standard  and  to  make  it  possible  to 
produce  the  gold  in  the  United  States  which  it  needs  in  its  monetary 
system.  It  seems  to  me,  Mr.  Lawrie  has  worked  out  a  most  excellent 
way  of  doing  this. 

Onerous  Tax  Conditions 

I  think  that,  as  a  nation,  we  are  in  rather  a  serious  situation  at  the 
present  time.  The  fact  that  we  need  great  amounts  of  money  to  finance 
the  obligations  the  Government  contracted  in  this  war  has  made  it  neces- 
sary that  taxes  be  levied  on  practically  everything.  Such  a  condition 
leads  to  undue  extravagance.  A  two-cent  tax  is  paid  on  a  five-cent 
cigar,  and  the  seller  of  the  cigar  makes  it  ten — even  money.  As  a  con- 
suming people,  we  are  not  only  paying  for  the  tax  the  Government  puts 
on,  but  about  as  much  more  that  our  neighbor  puts  on. 

So,  I  have  little  doubt  but  that  the  manufacturers  of  gold  jewelry  have 
already  discounted  the  possibility  of  having  an  advance  in  gold,  but  do 
not  fear  for  a  moment  that  they  are  going  to  be  hurt  by  adding  a  little 
to  the  cost  of  their  material.  Gold  jewelry  is  a  luxury,  not  a  necessity,, 
and  perhaps  it  will  become  more  popular  as  the  luxury  becomes  more 
expensive.  Platinum  is  most  popular  now  because  it  brings  the  highest 
price. 

Nothing  Asked  of  Government 

We  are  not  here  to  ask  the  Government  itself  to  pay  this  extra  $10  per 
ounce  without  reimbursement.  We  are  saying:  Put  it  on  the  industry 
that  uses  our  gold  in  the  arts  and  trades.  Put  a  price  on  it  from  now 
on  that  will  enable  us  to  at  least  keep  the  gold-mining  industry  alive. 
I  think  the  committee  has  worked  out  some  good  resolutions.  I  hope  we 
can  secure  their  adoption,  and  if  we  do,  our  task  has  just  begun.  I  have 
seen  enough  of  Congressional  matters  to  know  that  even  a  good  idea  needs 
many  friends  and  a  great  deal  of  intelligent  pursuit  to  get  it  through 
Congress,  and  we  ought  to  send  a  strong  committee  there  from  The 
American  Mining  Congress.  I  believe  the  officers  of  this  Association, 
particularly  Mr.  Lawrie,  should  be  there;  Mr.  Callbreath  should  be  there. 
We  should  have  practical  mining  men  there  to  demonstrate  to  Congress 
both  the  possibility  and  the  necessity  as  well,  of  affording  a  measure  of 
relief.  Of  course,  this  relief  will  come.  It  will  come  sooner  or  later.  It 


66  REPORT  OF  PROCEEDINGS 

must  come  either  before  or  after  the  mines  are  shut  down.  It  will  be 
better  for  it  to  come  before  the  mines  are  closed,  before  they  fill  with 
water,  before  the  mining  communities  and  expert  organizations  are  dis- 
banded, and  before  the  mines  are  caved  and  rendered  impossible  of  further 
operation  at  all  without  a  tremendous  expenditure  of  money.  The  Gov- 
ernment expends  vast  sums  for  conservation  of  natural  resources.  Here 
is  an  opportunity  to  conserve  by  avoiding  a  tremendous  loss  to  the 
country  as  a  whole,  and  at  the  same  time  to  safeguard  our  own  Govern- 
ment and  our  debtor  governments  abroad  from  a  repudiation  of  their 
obligations.  Our  Government  and  these  debtor  governments  have  prom- 
ised to  pay  in  gold  of  our  present  standard  of  weight  and  fineness. 

Prosperity  for  Gold  Camps 

If  we  can  get  Congress  to  view  this  matter  as  we  view  it,  and  to 
speedily  pass  the  necessary  remedial  legislation,  then  we  will  witness 
such  a  revival  in  the  gold-mining  industry  as  we  have  never  seen  before. 
Prosperity  will  return  to  the  gold  camps,  and  the  prospector  as  well  as 
the  miner  will  be  happy  once  more,  and  our  Government  and  our  people 
will  be  benefited  equally  with  them.  [Applause.] 

The  matter  before  the  house  at  the  present  time  is  the  adoption  or 
rejection  of  this  resolution  as  presented  by  our  committee.  Are  there 
any  others  who  wish  to  speak  on  the  subject? 

Suggested  Amendment 

I  thought  possibly  we  might  add  to  these  resolutions  something  along 
these  lines:  We  are  tremendously  interested  in  the  monetary  situation 
and  stability  not  only  of  our  own  Government  but  of  the  foreign  gov- 
ernments of  the  world  to  whom  we  have  loaned  vast  billions  of  money. 
Unless  we  continue  our  gold  production  along  with  that  of  other  nations, 
and  you  may  be  sure  that  England  and  France — and  England  particu- 
larly— will  see  to  it  that  their  mines  will  have  justice,  we  are  thereby 
shifting  a  moral  obligation.  If  our  debtor  nations  do  not  have  a  suffi- 
cient supply  of  gold  to  enable  them  to  pay  even  the  interest  on  their 
debts  to  us,  then  we,  as  a  nation,  must  suffer.  These  debtor  nations 
will  become  bankrupt,  and  we  will  be  paid,  if  at  all,  in  depreciated  cur- 
rency. We  must  give  them  an  opportunity  to  pay  us  back  100  cents 
on  the  dollar,  and  that  opportunity  lies  in  the  United  States  producing 
all  the  gold  we  reasonably  can,  so  that  there  may  be  as  great  a  stock 
of  gold  as  possible  in  the  world  upon  which  eventually  foreign  nations 
may  draw  to  cover  their  obligations.  In  other  words,  we  will  take  their 
goods  and  pay  for  them  in  our  gold,  by  a  system  of  credits  or  otherwise, 
and  thus  enable  them  to  pay  their  loan  obligations. 

MR.  LAWRIE :  Mr.  Chairman,  before  I  omit  I  wish  to  state  a  matter 
which  came  to  my  attention  last  Monday,  a  week  ago,  when  I  was  in  New 
York  to  see  a  gentleman  in  connection  with  this  movement.  I  accidentally 
was  led  into  the  editorial  office  of  a  writer  who  has  become  very  popular 
with  the  editorial  staffs  of  papers  all  over  the  country,  and  he  confided 
to  me  that  an  article  was  soon  to  be  published  by  quite  a  prominent  man 


THE  AMERICAN  MINING  CONGRESS  57 

advocating  that  the  Government  should  take  over  the  operation  of  the  gold 
mines  of  the  United  States.  The  argument  chiefly  advanced  by  this 
gentleman,  whose  name  I  cannot  give,  was  based  upon  the  elasticity 
which  the  Government  would  then  have — they  could  either  stimulate 
production  or  let  it  die  out.  Such  a  plan  would  satisfy  all  these  fellows 
that  think  we  have  a  lot  more  gold  than  we  really  need,  and  being  a 
friend  of  this  gentleman,  I  spoke  to  him  of  this  proposal,  more  because 
I  wanted  to  preserve  his  freedom  of  action  later  than  from  an  editorial 
standpoint.  He  did  say  to  me  that  he  would  reserve  his  editorial  com- 
ment on  the  article  until  we  had  met  here,  and  I  promised  to  supply 
him  with  the  action  taken  by  the  Conference  and  the  proposals  that 
were  discussed  here. 

Believes  in  Preparedness 

When  I  see  something  like  that  is  coming,  I  always  believe  in  pre- 
paredness. They  think  that  you  should  wait  until  you  get  hit  over  the 
head  before  you  get  ready  to  hit  back,  but  the  man  who  gets  in  the  first 
punch  is  the  man  who  gets  there.  It  is  very  necessary  to  follow  that 
up  in  order  to  defeat  an  object.  The  Plumb  Plan  was  introduced  in  Con- 
gress, and  at  first  sight  the  labor  element  had  a  great  deal  of  sympathy. 
Had  they  not  accompanied  that  proposal  by  a  threat,  they  would  have 
had  a  great  deal  more  sympathy.  I  am  simply  pointing  that  out  because 
I  want  to  know  from  this  Conference  what  your  attitude  is  in  regard 
to  Government  ownership  of  the  gold  mines  as  a  solution  of  this  problem 
in  the  last  analysis.  Of  course,  it  is  obvious  that  it  is  going  to  cost  the 
Government  $40  or  $50  an  ounce,  but  no  one  will  know  what  it  is,  and 
the  public  will  be  paying  the  bill  probably  without  being  aware  of  the 
fact  that  it  is  so  excessive. 

JUDGE  E.  W.  MARTIN  (South  Dakota) :  Would  it  not  be  well  to 
add  another  preamble  to  cover  that,  on  this  order — "Whereas,  the  United 
States  has  become  a  creditor  nation  of  the  other  civilized  nations  of  the 
world  to  the  extent  of  billions  of  dollars,  payable  in  gold,  and  is,  there- 
fore, vitally  interested  in  maintaining  a  normal  increase  in  the  gold  pro- 
duction in  order  that  these  nations  may  be  better  equipped  to  give  sound- 
ness to  their  financial  obligations"? 

United  States  Has  Sufficient  Gold 

MR.  LAWRIE:  Mr.  Chairman,  may  I  address  a  few  remarks?  The 
fact  is,  gentlemen,  that  the  foreign  nations  which  owe  us  money  have 
taken  more  precautions  to  protect  their  gold  reserve  than  we  have  our 
own.  They  are  sustaining  their  currency  in  that  way  from  loss  by 
manufacture  and  conversion  into  bullion.  They  have  done  that  on  their 
own  initiative,  and  as  you  all  know,  there  are  some  excellent  financiers 
in  Great  Britain  and  France. 

My  idea  is  that  ours  is  a  country  that  has  ample  gold  for  the  present, 
comparatively  speaking.  With  them  it  is  a  very  delicate  premise  for 
us,  as  a  nation,  to  suggest  this  possibility.  Rather  that  we  should  seek 
a  constructive  solution  of  the  problem  in  the  United  States,  the  result 


58  REPORT  OF  PROCEEDINGS 

of  which  would  be  soon  followed  by  the  force  of  preceptive  example  by 
these  foreign  nations.  That  is  my  view  of  this  subject,  and  I  simply 
throw  it  out  for  what  it  is  worth. 

JUDGE  MARTIN:  You  mean  that  it  might  be  better  form  if  no 
reference  to  this  foreign  indebtedness  be  made? 

Destruction  of  Coinage  Act 

MR.  LAWRIE :  We  are  confronted  by  the  question  of  the  passage  of 
the  Coinage  Destruction  Act,  from  a  national  standpoint,  for  this  reason. 
I  do  not  know  but  that  it  might  be  well  to  go  into  this  in  detail.  It 
will  have  to  be  made  the  subject  of  a  resolution,  and  I  have  a  letter  here, 
which  I  have  addressed  to  both  the  Senate  and  the  House,  conveying  the 
bill  that  will  be  introduced  after  a  very  careful  study  of  the  coinage  laws 
of  the  United  States.  I  did  it  at  a  moment  when  the  price  of  silver 
was  $1.25  per  ounce,  at  a  time  when  it  was  almost  apparent  that  in 
the  matter  of  a  few  days  the  bullion  price  of  silver  was  going  to  exceed 
the  price  of  the  dollar  and  there  was  a  great  deal  of  currency  being 
discounted  because  of  its  paramount  bullion  value.  It  has  been  the 
same  in  other  countries  as  well.  Now,  England  six  days  ago  passed  a 
law  prohibiting  the  exportation  of  silver  bullion.  That  shows  how  hard 
pressed  they  are  for  silver. 

I  have  laid  before  the  Banking  and  Currency  Committees  of  the  House 
and  Senate  facts  in  regard  to  the  destruction  of  gold  and  silver.  This 
represents  an  unknown  drain  on  the  gold  reserve.  Just  what  that 
destruction  is  is  an  unknown  quantity.  In  France  and  England  the 
destruction  of  coin  has  gone  so  far  as  to  make  it  absolutely  imperative 
to  build  up  the  reserve  as  much  as  possible.  They  did  not  have  money 
enough  to  transact  their  business.  We  want  to  avoid  that. 

Cost  of  Minting  Coins 

You  would  be  surprised  to  learn  that  it  costs  $17.28  to  mint  $1,000  in 
silver  dimes.  It  costs  $15  and  over  to  mint  $1,000  in  quarter  dollars, 
and  $13.50  plus  to  mint  $1,000  in  half  dollars.  We  have  not  minted  any 
silver  dollars  for  a  number  of  years,  so  we  have  no  figures  that  we  could 
make  a  comparative  statement  with  reference  to  these  other  figures  I 
have  given  you,  because  of  the  change  in  cost. 

Mr.  Roberts  suggested  the  passage  of  such  an  act.  I  noticed  in  his 
statement  for  the  National  City  Bank  that  he  called  attention  to  this 
fact,  and  without  going  into  details  I  could  see  he"  had  something  in 
mind  for  urging  the  acceptance  of  such  a  proposal  now.  I  do  think,  if 
we  pass  such  a  law  here,  that  these  foreign  countries  would  rapidly  pass 
a  similar  law  in  their  country  protecting  our  coin  while  abroad,  and  it 
would  be  very  healthy  for  our  currency  situation  all  around  if  that  took 
place. 

I  do  not  question  but  that  our  financial  authorities  at  Washington 
have  been  watching  this  very  closely.  They  have  probably  anticipated 
this  situation,  but  as  yet  no  concrete  action  has  appeared  on  the  floor 


THE  AMERICAN  MINING  CONGRESS  59 

of  either  the  House  or  Senate,  and  it  is  a  very  timely  moment  that  such 
consideration  be  given  to  the  subject. 

Purely  American  Question 

CHAIRMAN  SEAMAN:  My  idea  was  this:  This  resolution  we  are 
getting  up  is  not  to  be  digested  by  foreign  nations.  It  is  to  be  digested 
by  The  American  Mining  Congress  and  the  people  of  America.  If  you 
can  show  them  it  is  dollars  and  cents  to  them  in  giving  them  relief,  we 
are  going  to  further  our  own  cause.  I  believe  there  is  no  section  that 
could  be  added  to  this  that  would  help  the  passage  of  this  resolution  as 
much  as  that  reference.  We  are  trying  to  get  this  legislation  for  America, 
and  we  ought  to  make  it  strong,  and  I  think  we  should  insert  some  argu- 
ment to  that  effect.  Of  course,  this  will  have  to  go  before  the  Resolu- 
tions Committee. 

MR.  LAWRIE :  The  Banking  and  Currency  Committee  will  probably 
be  the  one  before  which  this  evidence  will  be  presented,  and,  of  course, 
Senator  Owen  and  a  number  of  others  on  that  committee  will  sense  very 
readily  the  necessity  for  it  from  this  angle.  I  do  not  know  whether  the 
American  people  will  quite  catch  it  or  not. 

CHAIRMAN  SEAMAN:     Any  other  remarks  on  that  resolution? 

A  World  Problem 

JUDGE  MARTIN:  In  order  to  get  before  the  Conference  the  sug- 
gestion of  the  chairman,  I  move  that  the  resolution  as  reported  be 
amended  by  adding  another  section  to  the  preamble  which  shall  refer 
to  the  fact  that  the  United  States  has  now  become  a  large  creditor 
nation,  obligations  to  be  paid  in  gold,  and  is,  therefore,  vitally  interested 
and  under  moral  obligation  not  only  to  maintain  its  own  gold  standard, 
but  to  encourage  the  production  of  gold,  as  far  as  possible,  for  the  needs 
of  all  nations. 

CHAIRMAN  SEAMAN:  Is  there  a  second  to  that  motion?  If  not, 
the  question  arises  on  the  passage  of  the  resolution.  Does  the  com- 
mittee present  this  resolution  and  move  its  adoption?  I  take  it  for 
granted  that  it  does.  Those  favoring  the  adoption  of  the  resolution 
as  read  will  signify  by  saying  "Aye";  contrary,  "No." 

(Motion  unanimously  carried.) 

MR.  LAWRIE:  Mr.  Chairman,  I  assume  that  we  might  have  an 
opportunity  to  go  over  that  with  a  sort  of  microscope  from  the  stand- 
point of  making  any  little  detail  corrections  that  might  be  necessary  in  it. 

CHAIRMAN  SEAMAN:  That  will  come  before  the  main  committee. 
This  is  merely  a  suggestion  for  their  consideration. 

Letter  from  England 

MR.  HAMILTON:  I  have  received  a  letter  from  Mr.  Kennan  that 
gives  us  some  information.  He  wrote  the  following:  "The  attached 
letter  from  son  of  Sir  Lionel  Phillips,  who  is  a  large  gold-mine  operator 
on  the  Rand,  states  that  gold  was  115  shillings  in  May  last  at  London. 


60  REPORT  OF  PROCEEDINGS 

It  was  up  to  120  and  125  shillings  previous  to  that,  and  transactions 
have  been  made  since  at  130  shillings.  Unless  this  Sir  Lionel  Phillips' 
letter  is  inserted  in  the  records  of  the  Convention,  please  return  it  to  me 
at  your  convenience." 

The  letter  which  he  encloses  is  in  part  as  follows:  "The  standard 
price  for  fine  gold  in  England  is  now  rather  less  than  85  shillings  per 
ounce,  though  for  trade  purposes  it  has  risen  to  the  altogether  abnor- 
mally high  figure  of  115  shillings,  owing  to  the  trade  having  been  starved 
for  gold  during  the  war."  That  gives  some  idea  of  the  price  at  which 
gold  is  being  sold  to  the  trade  in  London. 

MR.  LAWRIE:  When  England  took  the  embargo  off  of  gold  in 
July,  she  permitted  South  Africa  and  Australia  to  ship  her  gold  here. 
Mr.  Roberts  expected  a  great  volume  to  come  in,  but  there  has  been  very 
little  coming,  and  it  must  be  that  they  are  getting  a  better  price  than 
the  premium  would  indicate.  Of  course,  the  American  producer  cannot 
get  into  that. 

JUDGE  MARTIN:  I  wish  to  make  a  motion  for  the  presentation  of 
this  resolution  to  The  American  Mining  Congress. 

(Motion  duly  seconded  and  adopted.) 

CHAIRMAN  SEAMAN:     Is  there  any  further  business? 

MR.  LAWRIE:  The  matter  of  the  resolution  to  cover  the  Coinage 
Destruction  Act. 

CHAIRMAN  SEAMAN:     Have  you  such  a  resolution  prepared? 

MR.  LAWRIE :     I  have  not. 

JUDGE  MARTIN:  I  suggest  that  you  get  it  in  form  and  have  the 
committee  consider  it. 

MR.  BETTS:  My  idea  is  to  draw  that  up  this  afternoon  and  submit 
it  at  the  morning  conference.  Then  it  will  go  right  to  the  Resolutions 
Committee  tomorrow  afternoon. 

CHAIRMAN  SEAMAN:  Why  should  we  not  take  the  points  up  at 
this  meeting,  so  that  we  lose  no  time? 

To  Prohibit  Coinage  Destruction 

MR.  LAWRIE:  I  have  a  copy  of  the  bill  to  be  introduced.  This 
was  drawn  up  after  very  careful  analysis  by  counsel  and  review  of  the 
Coinage  Acts  of  the  country. 

A  BILL 

TO   PROHIBIT    THE   DESTRUCTION   OF   GOLD   AND 
SILVER  COINS. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America,  in  Congress  assembled,  that  any 
person  who  purposely  and  knowingly,  by  an  art,  way  or  means, 
shall,  except  as  authorized  by  law,  totally  destroy  any  gold  or 
silver  coins,  as  such,  which  have  been  or  which  may  hereafter 
be  coined  at  the  mints  of  the  United  States,  or  any  foreign  gold 
or  silver  coins  which  are  by  law  or  which  hereafter  may  be  made 


THE  AMERICAN  MINING  CONGRESS  61 

by  law  current,  or  are  in  actual  use  and  circulation  as  money 
within  the  United  States,  shall,  upon  conviction,  be  imprisoned 
not  more  than  five  years  and  fined  not  more  than  $10,000. 

CHAIRMAN  SEAMAN:  Are  there  any  objections  to  the  main  point 
contained  in  this  bill  which  may  be  presented  by  resolution  to  the  Reso- 
lutions Committee  so  as  to  gain  time? 

JUDGE  MARTIN:  The  only  suggestion  I  would  make — I  notice  that 
it  protects  foreign  coins  only  so  far  as  they  are  in  use  in  our  circula- 
tion. We  will  suppose  it  should  be  profitable  to  gather  foreign  gold  coins 
and  reduce  them  to  bullion  for  the  purposes  of  our  trade. 

MR.  LAWRIE:  If  we  pass  the  bill  we  recommend  to  Congress,  of 
course  that  would  be  covered. 

MR.  DAVIS :  Have  we  not  a  law  at  present  that  no  foreign  coins  can 
circulate  in  this  country? 

MR.  LAWRIE:  On  the  contrary,  we  have  a  law  that  allows  this 
circulation. 

MR.  DAVIS :  It  seems  to  me  that  the  circulation  of  Canadian  quarters 
in  Detroit  was  stopped  by  law. 

MR.  LAWRIE:  There  are  certain  coins  that  have  been  made  cur- 
rent, but  there  are  others  that  have  not  been  made  current  by  law.  I 
cannot  tell  you  offhand  which  they  are.  We  can  readily  find  out  which 
have  been  made  legally  current. 

Government  Ownership 

CHAIRMAN  SEAMAN:     Is  there  any  further  business? 

MR.  LAWRIE :  I  wanted  to  get  the  opinion  of  these  gentlemen  on 
the  question  of  Government  ownership  of  mines. 

JUDGE  MARTIN:  I  move  that  the  Committee  on  Resolutions  be 
authorized  to  prepare  a  resolution  expressing  the  sense  of  this  Confer- 
ence that  under  no  circumstances  should  the  Government  of  the  United 
States  be  authorized  to  take  over  and  operate  the  mines. 

MR.  BETTS:  Do  I  understand  that  that  has  ever  been  suggested 
publicly? 

MR.  LAWRIE :     I  just  wanted  the  sense  of  this  Conference. 

JUDGE  MARTIN:     I  withdraw  my  motion. 

MR.  LAWRIE:  I  attempted  to  size  up  the  situation  in  the  interest 
of  the  Government  generally,  and  it  was  my  feeling  that  Government 
operation  of  anything  was  a  poor  substitute  for  private  and  efficient 
management. 

CHAIRMAN  SEAMAN:  Is  there  any  further  business  to  come  before 
this  Conference?  If  not,  we  stand  adjourned. 


62  REPORT  OF  PROCEEDINGS 


NATIONAL  CONFERENCE  OF  WAR  MINERALS 
PRODUCERS 

FIRST  SESSION 
TUESDAY  AFTERNOON,  NOVEMBER  18   . 

The  War  Minerals  Conference  convened  at  2.30  P.  M.  in  the  Planters' 
Hotel,  Hon.  E.  C.  Voorheis,  of  San  Francisco,  presiding.  Secretary  J.  F. 
Callbreath  was  introduced. 

SECRETARY  J.  F.  CALLBREATH:  I  have  been  interested  in  the 
War  Minerals  proposition  from  the  time  the  first  War  Minerals  bill  was 
developed  in  Washington.  I  have  followed  it  through  perhaps  more 
closely  than  any  other  person  in  the  country,  and,  therefore,  I  feel  that 
there  are  some  things  I  may  say  to  you  gentlemen  which  may  be  of 
interest. 

In  the  early  part  of  the  war  we  found  that  certain  minerals  were  not 
available  to  this  country  because  of  the  fact  that  we  had  imported  all 
those  minerals  from  foreign  countries.  In  the  early  part  of  last  year 
a  meeting  was  held  by  the  Shipping  Board  in  Washington,  with  repre- 
sentatives of  the  Steel  Institutes'  Committee,  in  which  appeals  were  made 
to  the  Shipping  Board  to  release  more  ships  for  transportation  of  manga- 
nese from  Brazil.  The  principal  appeal  was  made  with  reference  to 
manganese  and  the  leads  from  a  manufacturing  standpoint.  Mr.  James 
A.  Farrell  stated  to  that  committee:  "Gentlemen,  if  you  shut  off  the 
supply  of  manganese  from  Brazil  tomorrow,  in  three  months'  time  tha 
steel  industry  of  this  country  will  be  paralyzed.  Ninety  per  cent,  of 
the  products  of  our  plants  is  now  for  essential  war  products."  There- 
fore, his  appeal  was  that  ships  which  the  Shipping  Board  was  attempting 
to  take  from  that  service  and  put  into  the  business  of  carrying  soldiers  and 
munitions  of  war  and  provisions  to  the  front  must  be  taken  from  that 
work,  at  that  time  intensely  important,  in  order  that  we  may  get  from 
Brazil  the  manganese  with  which  our  steel  plants  might  continue  oper- 
ations. 

Asked  Fifty  Millions 

It  was  at  that  time  that  the  War  Minerals  Bill  was  before  Congress. 
It  provided  an  appropriation  of  fifty  millions  of  dollars,  through  which 
the  Government  might  be  able  to  contract  with  those  producers  in  this 
country  who  thought  they  might  produce  manganese,  but  could  not  pro- 
duce it  in  ordinary  times  because  of  the  fact  that  manganese,  in  Brazil, 
could  be  produced  at  $16  per  ton,  while  at  most  of  the  points  at  which 
American  manganese  could  be  produced,  the  freight  charge  after  the 
manganese  was  produced,  was  more  than  $16  a  ton.  Therefore,  it  was 
impossible  for  them  to  meet  the  ordinary  competition,  and  it  was  because 
of  this  that  this  large  appropriation  was  made  by  Congress,  with  a  view 
of  furnishing  a  contract  for  such  period  of  time  as  would  enable  them 


THE  AMERICAN  MINING  CONGRESS  63 

to  pay  back  the  cost  of  their  investment  whenever  precipitent  competi- 
tive conditions  prevailed. 

Government  Encouragement 

At  that  time,  and  when  this  appeal  was  made  for  ships,  the  agency 
of  the  Government  realizing  the  tense  conditions,  started  out  to  increase 
the  production  of  these  ores  throughout  the  country.  They  said  to  the 
man  who  had  these  deposits,  who  thought  he  could  develop  these  ores, 
if  the  price  was  right,  "We  have  no  authority  now  to  contract  with  you, 
but  here  is  a  bill  which  Congress  has  under  consideration  which  provides 
the  agency  and  funds  through  which  we  may  contract  with  you.  We  do 
not  want  you  to  wait  until  we  get  the  money,  because  we  want  the  stuff 
ready  when  we  get  the  money,  and,  therefore,  we  urge  you  to  produce 
that."  Without  any  attempt  to  criticise  the  United  States  Geological 
Survey,  its  report  was  to  the  effect  that  the  total  supply  of  manganese 
ores  in  the  United  States  was  only  sufficient,  if  it  all  were  used,  to  meet 
the  demands  of  the  country  for  from  three  to  five  years. 

Personally,  I  had  stated  before  the  Senate  Committee  that  I  believed, 
except  for  tin  and  platinum,  that  the  United  States  contained  ores  for 
all  its  needs.  One  gentleman  said  he  thought  my  enthusiasm  was  getting 
the  better  of  my  judgment.  I  still  insist  that  that  is  right,  and  if  the 
price  is  right  this  country  will  be  able  to  produce  all  but  those  two 
minerals. 

Mining  Men  Responded 

We  have  found  more  manganese  ore  at  three,  four  or  five  places  than 
was  thought  to  be  in  the  country.  To  build  machinery  and  operate  the 
mines  required  a  large  amount  of  money,  and  when  the  Government 
agents  said:  "Go  to  it  and  produce  this  stuff,"  men  over  this  country 
expected  that  the  authority  would  be  placed  with  someone  to  purchase 
these  ores,  and  the  Government  would  guarantee  that  price  for  three 
or  four  years  until  the  original  investment  was  recovered.  At  that  time 
we  all  anticipated  that  the  war  was  going  to  last  for  some  years,  at 
least  longer  than  it  did;  all  of  us  believed  that  the  men  who  went  out 
and  produced  these  ores  were  performing  the  greatest  service  that  could 
be  performed.  I  grant,  these  men  anticipated  a  profit,  but  has  anything 
b'een  done  of  consequence  that  did  not  have  in  it  some  element  that  pro- 
duced the  activity.  I  want  to  say  to  you  that  I  believe  the  best  things 
of  this  world,  and  all  of  the  things  of  this  world  that  are  of  any  account, 
come  about  as  the  result  of  intelligent  selfishness.  There  may  have  been 
a  little  intelligent  selfishness,  although  it  has  proved  to  be  a  little  less 
intelligent.  But  these  men  did  produce  the  ore,  and  it  was  the  greatest 
service  they  could  render  their  country  at  that  time.  The  quick  termi- 
nation of  that  war — for  which  we  are  all  thankful — left  these  men  with 
these  investments  on  their  hands  entirely  useless. 

Asked  Relief  of  Congress 

After  that  condition  prevailed  these  men  undertook,  through  the  Amer- 
ican Mining  Congress,  to  have  Congress  pass  a  bill  to  appropriate  some- 


64  REPORT  OF  PROCEEDINGS 

thing  for  the  adjustment  of  this  matter.  The  bill  known  as  the  War 
Minerals  Relief  Bill  was  introduced,  and  as  the  result  of  the  work  of 
The  American  Mining  Congress,  was  passed.  It  left  to  the  Secretary  of 
the  Interior  the  power  to  say  how  those  claims  should  be  settled.  The 
Secretary  of  the  Interior,  in  order  to  create  an  agency  through  which 
the  work  was  to  be  done,  created  what  is  known  as  the  War  Minerals 
Commission.  We  are  glad  today  to  have  both  the  members  of  that  Com- 
mission here.  Unfortunately,  the  third  member  of  that  Commission,  Mr. 
Foster,  who  for  many  years  was  the  chairman  of  the  Mines  and  Mining 
Committee  of  the  House,  and  was  familiar  with  this  legislation  and 
all  the  conditions  which  surround  it,  has  passed  away  during  the  past 
few  months,  leaving  two  members  upon  that  Commission. 

Criticisms  of  Commission 

I  have  heard  a  great  deal  of  criticism  of  this  Commission.  I  have  had 
a  number  of  telegrams  and  letters  insisting  that  this  Convention  should 
pass  resolutions  criticising  that  Commission  and  the  Government  because 
these  claims  were  not  settled  as  the  claimants  felt  they  should  be.  I 
want  to  say,  gentlemen,  to  you,  that  I  hope  no  radical  resolutions  will 
be  adopted  by  this  meeting.  I  hope,  that  in  the  drafting  of  these  reso- 
lutions, whatever  they  may  be,  you  may  adjust  your  minds  to  the  actual 
facts  that  these  men  who  are  charged  with  the  responsibility  of  protect- 
ing the  Government's  funds,  while,  at  the  same  time,  they  do  justice  to 
you,  are  necessarily  bound  by  the  wording  of  the  law  which  gives  them 
authority  and  by  the  constructions  of  that  law  which  are  given  down  by 
the  Department  of  Justice  in  Washington.  Therefore,  if  this  Commission 
has  failed  to  meet  the  expectations  of  all  the  War  Minerals  claimants,  if 
it  is  because  the  wording  of  the  law  as  they  understand  it,  and  the 
authority  which  they  exercise  is  not  sufficient,  it  seems  to  me  that  our 
resolution  should  be  to  ask  Congress  to  again  instruct  that  Commission 
that  this  law  was  not  intended  to  be  treated  as  a  technical  measure  with 
strictly  technical  requirements  surrounding  it,  but  that  it  should  be  admin- 
istered— as  I  believe  Congress  intended — as  a  relief  measure,  to  be  admin- 
istered in  an  equitable  way. 

Fault  Lies  With  Attorney-General 

I  do  not  believe  that  we  have  a  right  to  criticise  this  Commission, 
because  the  Attorney-General  of  the  United  States  in  construing  that 
law,  said:  "You  have  no  right  under  this  law  to  pay  a  claim  to  any, 
except  he  had  a  direct  connection  with  some  agency  of  the  Government." 
I  hold  that  it  would  be  absolutely  unjust  if  my  neighbor  and  myself,  with 
equal  desire  to  help  the  Government,  had  done  the  same  things,  expended 
the  same  amount  of  money,  produced  the  same  results,  should  be  dis- 
criminated between,  because  I  might  have  been  appealed  to  by  an  agency 
of  the  Government  and  I  might  have  transferred  to  him  the  inclination 
that  his  Government  desired  and  required  that  he  should  do  the  same 
things  that  I  do.  I  do  not  believe  there  should  be  a  distinction  between 
the  two  men,  and  if  the  War  Minerals  Bill  as  it  now  stands  does  not 
provide  for  us  two,  I  who  received  a  direct  request,  and  he  who  took 


THE  AMERICAN  MINING  CONGRESS  65 

from  me  the  statement  that  that  direct  request  was  made  to  me  and 
applied  to  him,  and  if  the  War  Minerals  Commission  believes  that  a  dis- 
tinction must  be  drawn,  I  think  it  is  up  to  us  to  go  and  say  to  Congress: 
"We  know  you  did  not  mean  to  discriminate  between  two  men  acting 
under  the  same  motive  and  losing  the  same  amount."  I  believe  that  we 
should  ask  Congress  to  pass  an  additional  act  instructing  the  War  Min- 
erals Commission  and  outlining  methods  by  which  they  shall  administer 
this  law.  I  believe  Congress  can  be  induced  to  state  that  it  did  not  desire 
to  discriminate  between  the  two  men,  both  having  similar  losses  and 
actuated  by  the  same  thing.  I  feel  that  any  man,  no  matter  who  he  may 
be,  who,  at  the  request  or  because  of  the  general  knowledge  that  his 
Government  needed  these  supplies,  who  undertook  to  develop  those  sup- 
plies, and  because  of  that  sustained  a  loss,  that  such  claims  should  be 
adjusted  upon  an  equitable  basis. 

Opened  Nation's  Resources 

I  want  to  state  that  I  believe  that  the  benefit  to  the  United  States 
from  the  developments  which  grew  out  of  the  necessities  of  the  war  is 
worth  more  to  the  United  States,  a  thousand  to  one,  than  the  paltry  appro- 
priation of  $8,500,000  which  has  been  appropriated  for  the  relief  of  the 
men  who  have  shown  us  that  instead  of  not  having  any  manganese  in 
this  country,  we  have  enough  to  supply  the  needs  for  centuries ;  who  have 
shown  us  that  we  have  an  abundance  of  chromite;  that  where  we  were 
short  of  pyrites  we  have  enough  for  all  our  demands;  who  have  shown 
us  that  in  the  case  of  magnesite  we  have  enough  for  a  million  years. 

I  say  to  you  that  the  influence  which  brought  about  the  development 
of  these  resources  will  be  of  untold  value  to  this  country  for  centuries 
to  come,  and  therefore,  we  should  not  be  niggardly  to  those  who  have 
developed  those  resources,  and  we  should  be  liberal  with  the  claims  they 
make,  so  that  they  may  get  out  of  this  transaction  without  sustaining 
substantial  loss.  I  thank  you.  (Applause.) 

Commission  Requests  Criticism 

HON.  PHILIP  N.  MOORE  (of  the  War  Minerals  Commission) :  Mr. 
chairman,  the  Commissioners  are  here  by  authority,  by  request  as  well 
as  by  authority,  but  I  think  it  is  nothing  more  than  fair  that  since  they 
are  under  criticism  from  some  of  their  friends  that  the  matter  should 
be  developed  from  the  other  side  before  the  Commission  has  any  remarks 
to  make  on  the  matter  whatever.  If  we  are  criticised  we  want  to  know 
why,  and  I  am  very  sure  some  of  the  gentlemen  here  will  be  able  to 
voice  their  grief  and  their  reasons  for  objecting  to  certain  decisions 
which  have  been  made,  and  as  a  matter  of  tactics  and  ordinary  procedure, 
I  think  the  floor  should  be  heard  from  until  we  know  why  they  do  not 
like  us. 

CHAIRMAN  VOORHEIS:  I  guess  that  is  satisfactory,  Mr.  Moore. 
You  can  hear  the  others  first  and  then  you  may  know  how  to  answer. 
Mr.  Smith,  Chief  of  the  War  Minerals  Division  of  the  American  Mining 
Congress,  will  address  you  now. 


66  REPORT  OF  PROCEEDINGS 

MR.  SMITH:  I  will  just  take  a  moment  at  this  time  to  avoid  any 
possibility  of  misunderstanding.  It  was  far  from  our  idea  in  calling  on 
Mr.  Moore  first  to  get  him  to  commit  himself  before  we  had  made  our 
attitude  plain. 

Position  of  Mining  Congress 

The  position  of  the  Mining  Congress,  with  regard  to  War  Mineral 
claims,  is  well  understood  by  the  claimants  who  have  come  in  contact 
with  the  Congress,  and  by  the  Commission  in  its  contact  with  the  Con- 
gress. The  Mining  Congress  does  not  represent  any  claimant  or  any 
group  of  claimants  individually,  nor  does  it  vouch  for  the  merits  of  any 
particular  claim  on  any  particular  point  in  that  claim.  The  Mining  Con- 
gress does  stand  for  the  rights  of  the  claimants  as  a  whole,  and  for 
the  merits  of  the  War  Minerals  situation  in  full,  and  it  does  stand  for 
the  benefits  which  should  accrue  to  the  claimants  through  the  passage 
of  the  original  War  Minerals  Act,  and  in  its  work  in  Washington  with 
the  Interior  Department,  and  with  the  War  Minerals  Relief  Commission, 
and  again,  through  the  claimants  it  has  tried  to  work  out  an  equitable 
form  of  justice  for  the  claimants  as  a  whole  and  for  the  individual 
claimant  as  his  claim  falls  under  different  portions  of  the  interpreta- 
tion of  the  original  War  Minerals  Act. 

Not  An  Attorney 

At  the  time  of  the  passage  of  the  original  War  Minerals  Relief  Bill 
it  was  proposed  that  the  Mining  Congress  should  act  as  attorney  for  the 
protection  of  the  individual  claimant  and  for  the  collection  of  these 
individual  claims.  The  statement  I  have  just  made  shows  that  such  a 
course  would  have  been  both  improper  and  unwise,  the  advantage  to  the 
individual  claimant  would  have  been  questionable,  and  the  position  of 
the  Mining  Congress  with  the  claimants  as  a  whole  and  with  the  War 
Minerals  Relief  Commission  would  have  been  very  doubtful,  so  the  Min- 
ing Congress  has  adhered  absolutely  to  this  position  of  acting  for  the 
claimants  in  the  protection  of  their  rights  under  the  Act. 

We  are  very  much  disappointed  in  not  having  Mr.  Nelson  Franklin 
with  us  this  afternoon.  Mr.  Franklin  is  a  War  Minerals  claimant  who 
has  three  claims  under  this  Relief  Act,  and  he  had  prepared  a  very 
careful  statement  of  his  attitude  and  his  feeling  with  regard  to  what 
should  be  done  for  the  claimants  individually,  and  in  place  of  Mr. 
Franklin,  if  I  may,  I  will  ask  that  you  call  on  Mr.  Rakowsky  for  a 
moment.  Having  completed  the  statement  of  the  attitude  of  the  Mining 
Congress  and  its  policy  with  regard  to  War  Mineral  claims,  I  think  that 
is  all  I  can  say  on  the  present  situation  which  will  be  of  advantage  at 
this  time. 

THE  CHAIRMAN:    We  will  gladly  hear  Mr.  Rakowsky. 

MR.  RAKOWSKY:  Mr.  chairman,  when  I  am  asked  to  make  a  state- 
ment before  this  meeting,  giving  the  position  of  the  War  Mineral  Claim- 
ants, with  reference  to  the  War  Mineral  Relief  Measure,  I  would  state 
that  in  the  first  place  it  seems  to  me  that  the  Commissioners  who  were 


THE  AMERICAN  MINING  CONGRESS  67 

asked  and  who  consented  to  present  to  this  body  the  progress  which  has 
been  made  in  the  settlement  of  claims,  should  properly  first  give  the 
digest,  because  it  is  quite  natural  that  few  of  us  are  familiar  in  detail 
with  the  work  which  has  been  done.  Secondly,  in  being  asked  to  present 
the  position  of  the  claimant,  I  would  say  that  I  have  been  more  interested 
in  the  position  of  the  prospector  and  perhaps  am  not  so  well  qualified 
to  speak  from  the  angle  of  the  producer. 

Bill  Aimed  to  Relieve  Patriotic  Citizens 

Apparently,  the  Act  as  contemplated  and  transferred  to  three  very 
capable  gentlemen  to  administer,  was  conceived  for  the  purpose  of  taking 
care  of  the  legitimate  losses  made  by  patriotic  citizens  of  the  United 
States  who  engaged  in  the  development  and  production  of  war  minerals 
during  the  war  period.  Quite  naturally,  the  development  and  mining 
work  was  done  largely  by  mining  men,  mining  engineers  and  geologists, 
and  it  so  happens  that  a  number  of  men  in  the  mining  profession,  whom 
I  know  personally,  entered  into  war  minerals  development,  and  I  have 
had  considerable  opportunity  to  discuss  with  them  their  position  in  the 
matter  of  the  settlement  of  their  losses. 

Charged  Commissioners  Exceed  Authority 

Having  met  Mr.  Moore  a  short  time  ago,  I  pointed  out  to  him  the  very 
general  feeling  that  the  Commission  was  going  beyond  its  functioning 
powers,  in  that  it  was  making  interpretations  of  the  Act  which  many 
claimants  felt  were  unjust  and  not  within  the  province  of  the  Commis- 
sion. Mr.  Moore  has  thrown  the  burden  of  proving  the  viewpoint  of  the 
claimant  to  this  meeting  before  the  Commission  presents  the  statement 
of  the  work  which  it  has  accomplished,  and  has  inferred  that  perhaps 
some  hard  feeling  exists  as  between  some  of  the  claimants  and  the  Com- 
mission. This,  I  am  sure,  should  not  exist;  nevertheless,  a  frank,  open 
statement  of  the  position  of  some  of  the  claimants  with  reference  to  the 
position  which  the  Commission  has  taken  of  not  only  collecting  the  data 
relative  to  the  claims  but  of  reading  interpretations  into  the  Act  as 
passed  by  Congress  should  be  stated.  It  is  considered  that  many  of  the 
interpretations  of  the  Commission  are  unjust  and  unfair.  The  Commis- 
sion has  referred  to  the  Attorney-General  for  an  opinion  relating  to  one 
part  of  the  Act;  it  has  referred  to  the  Attorneys  of  the  Department  of 
the  Interior  for  other  interpretations,  but  has  also  undertaken  to  make 
interpretations  of  other  parts  of  the  law  within  its  own  body. 

Government  Severely  Criticised 

It  is  believed  generally  that  the  data  relating  to  claims  by  the  Com- 
mission had  better  have  been  collected,  and  when  the  interpretation  of 
the  Act  referring  to  this  data  was  found  impossible,  that  there  might 
better  have  been  made  a  recommendation  by  the  Commission  that  the 
Act  be  amended  so  that  they  could  function.  It  is  admitted  that  the  Act 
is  very  difficult  to  interpret,  and  no  action  has  been  taken  by  the  Com- 
missioners through  Secretary  Lane  to  clear  up  the  doubtful  and  unsettled 


68  REPORT  OF  PROCEEDINGS 

part  of  the  bill,  and  the  Commission  apparently,  as  well  as  Secretary 
Lane,  have  decided  that  the  best  policy  would  be  to  defer  asking  for 
instructions  or  calling  for  an  amendment  until  all  of  the  claims  had  been 
gone  over  and  passed  upon.  Many  splendid  departments  of  the  Govern- 
ment, such  as  the  United  States  Geological  Survey,  the  Bureau  of  Mines, 
Shipping  Board,  the  War  Industries  Board,  etc.,  have  been  severely  criti- 
cised for  not  going  behind  a  more  liberal  interpretation  of  the  Act  relat- 
ing to  requests. 

The  present  Commission  has  used  its  very  best  efforts  to  interpret 
the  Act  as  best  it  could,  yet  it  is  evident  that  the  Act  can  not  be  inter- 
preted justly  as  it  now  stands,  and  that  we  should  call  for  a  change  of 
the  law  by  going  back  to  Congress  and  having  the  Act  amended  so  that 
it  can  be  properly  construed.  Again,  because  of  the  wording  of  the  Act, 
the  prospectors  and  men  who  develop  their  properties  up  to  the  point  of 
production  and  have  made  losses  are  not  considered  under  the  Act  to 
have  the  right  to  present  their  claims. 

Again,  under  the  Act,  there  have  been  interpretations  with  reference 
to  the  return  of  moneys  used  in  the  purchase  of  the  fee  of  lands  operated 
and  the  Commission  has  made  the  ruling  that  moneys  so  spent  shall  not 
be  repaid. 

It  is  believed  that  if  it  was  doubtful  in  the  mind  of  the  Commission 
whether  repayment  should  be  made  of  moneys  spent  thus,  that  all  the 
cases  where  the  fee  purchase  question  was  involved  should  have  been 
massed  and  the  subject  should  have  been  presented  to  the  Attorney- 
General  for  interpretation,  and  in  the  event  that  his  judgment  was  in 
accord  with  the  judgment  of  the  Commissioners,  then  the  Commissioners 
should  have  represented  to  Secretary  Lane  the  necessity  of  an  amend- 
ment to  the  Act  to  take  care  of  this  situation. 

Calls  for  Amended  Law 

It  is  useless  for  the  Commission  to  attempt  to  go  further  in  their  inves- 
tigations or  in  settlements  of  claims  without  having  the  Act  amended. 
In  order  to  destroy  criticism  and  hard  feeling  which  is  being  reflected  on 
the  very  splendid  Government  departments  it  now  becomes  necessary 
for  the  Commission,  and  the  departments  of  the  Government,  to  get 
behind  this  body,  through  a  War  Minerals  Section  of  the  American  Min- 
ing Congress,  immediately  calling  for  liberalization  of  the  original  Act. 

There  is  no  body  in  the  United  States  who  can  handle  the  placement 
of  the  case  of  the  claimant  before  Congress  better  than  the  American 
Mining  Congress.  Before  this  meeting  adjourns  it  is  necessary  that  an 
organization  be  perfected  to  bring  about  amendments  of  the  Act. 

Personally,  I  was  instrumental  in  fostering  from  the  beginning  the 
development  of  the  plan  for  enlarging  production  of  War  Minerals.  Mr. 
Moore,  as  President  of  the  American  Institute  of  Mining  Engineers,  did 
splendid  work  also  from  the  beginning,  and  has  as  full  an  understanding 
of  the  situation  relating  to  production  of  war  minerals  as  anyone,  and 
there  can  be  no  criticism  of  the  Commission,  so  far  as  they  honorably 
believe  that  they  are  interpreting  the  Act  as  best  they  are  able  with  the 
means  at  hand,  but  when  the  Commission  continued  to  make  interpre- 


THE  AMERICAN  MINING  CONGRESS  69 

tations  and  settlements  of  claims  without  bringing  before  the  proper 
legislative  bodies  the  great  uncertainties  of  their  interpretations  and 
when  it  seems  likely  that  Secretary  Lane  will  insist  that  no  constructive 
legislation  be  asked  for  until  the  cases  have  all  been  decided  under  the 
present  law,  then  it  is  time  for  us  to  go  forward  as  a  unit  of  the  Amer- 
ican Mining  Congress  and  secure  fair  and  full  legislation,  giving  this 
Commission,  or  some  other  Commission,  definite  powers  under  a  fair  Act. 
Gentlemen,  I  feel  that  I  have  not  stated  the  claimants'  viewpoint  as 
well  as  I  might  had  I  peen  prepared  and  had  I  expected  to  be  called  upon, 
but  I  feel  that  the  solution  lies  in  the  amendment  of  the  Act;  that  the 
Commission  should  cease  their  interpretations  of  the  Act. 

Complains  of  Both  Law  and  Commissioners 

MR.  JAMES  T.  LLOYD:  Do  you  complain  of  the  Commission  or 
complain  of  the  law? 

MR.  RAKOWSKY:  It  is  a  question  of  the  law  coupled  with  the  com- 
plaint that  the  Commission  has  made  interpretations  which  are  unjust 
and  have  no  standing  under  the  original  Act. 

I  cannot  see  how  the  Commissioners  would  object  to  the  amendment 
of  the  law  at  this  time,  because  whatever  is  done  should  be  of  assistance 
to  the  Commission. 

Mr.  Shafroth  with  a  legal  mind,  and  Mr.  Moore,  one  of  the  most  re- 
spected mining  engineers  of  this  country,  are  interpreting  the  Act  liber- 
ally and  in  the  face  of  severe  criticism  and  without  any  recommendations 
for  corrections  of  the  flaws  in  the  Act.  No  unjust  claimant  would  have 
a  fighting  chance  to  secure  adjustment  under  the  law,  yet  the  legitimate 
prospector  who  comes  under  the  same  classification  as  the  man  who 
prepared  to  produce,  will  not  be  able  to  secure  reimbursement. 

MR.  LLOYD:  That  is  the  interpretation  of  an  attorney  on  the  out- 
side. The  Commissioners  have  interpreted  it  according  to  their  oath.  What 
I  am  getting  at  is  this:  why  do  you  criticise  the  Commission?  It  seems 
to  me,  if  there  is  anything  to  criticise  it  is  the  law,  and  not  complain  of 
these  splendid  men  for  the  service  which  they  have  rendered. 

MR.  SMITH:  I  think,  possibly,  Mr.  Lloyd's  suggestion  is  what  all  of 
us  have  in  mind.  We  are  simply  on  two  sides  of  the  same  fence  going 
in  the  same  direction,  but  the  fence  is  between  us  and  we  have  to  get 
across  it  some  way,  and  I  know  that  Mr.  Rakowsky  has  the  same  feeling 
that  all  of  us  have,  that  if  a  group  of  men  are  stranded  on  an  iceberg 
it  does  not  do  them  any  good  to  quarrel  about  how  they  got  there,  and 
it  certainly  does  not  do  any  good  to  quarrel  with  the  man  who  comes 
to  take  them  off  with  a  boat.  The  thing  to  do  is  to  get  a  boat  strong 
enough,  and  that  is  the  object  of  this  conference. 

It  is  difficult  in  phrasing  a  statement  which  covers  any  particular  case 
or  any  particular  feature  of  the  War  Minerals  situation  not  to  use  the 
word  "Commission"  occasionally,  and  when  it  does  come  up  that  way, 
I  am  sure  there  is  nothing  intended  in  it  to  disparage  the  Commission 
itself. 


70  REPORT  OF  PROCEEDINGS 

MR.  LLOYD:  The  disposition  seems  to  be  to  criticise  the  Commis- 
sion. Why  criticise  the  Commission? 

Law  Should  Be  Corrected 

MR.  SMITH :  There  is  no  occasion  to  criticise  the  Commission  if  it  has 
done  its  duty.  The  courts  of  the  United  States  do  not  decide  cases  to 
suit  the  attorneys.  You  can  prove  that  every  case  that  comes  before 
the  court  was  wrong,  but  after  a  judicial  body  has  determined  the  matter 
in  accordance  with  its  own  judgment  it  ought  not  then  be  criticised.  If 
there  is  anything  wrong,  it  is  the  law  which  they  have  interpreted.  The 
law  ought  to  be  corrected  if  it  is  wrong.  That  is  the  object  of  this 
meeting. 

CHAIRMAN  VOORHEIS:  When  this  law  was  passed  and  the  money 
appropriated,  the  claimants  expected  to  get  it  if  they  had  a  just  claim. 
Now,  as  the  Commission,  as  I  understand  they  interpret  the  law,  they 
are  not  at  liberty  to  function  under  the  law  as  the  claimants  think  they 
should.  That  is  about  the  way  I  understand  it.  I  may  be  entirely  wrong. 

Senator  Shafroth,  we  would  like  to  have  a  word  from  you. 

SENATOR  SHAFROTH:  I  think  probably  Mr.  Moore  had  better  speak, 
but  I  have  no  objection. 

MR.  MOORE :     My  chief  speaks  first. 

Statement  By  Chairman  of  Commission 

SENATOR  SHAFROTH:  Gentlemen,  I  was  a  member  of  the  Senate 
of  the  United  States  when  this  legislation  was  passed.  I  was  a  member 
of  the  Committee  on  Mines  and  Mining  that  framed  the  original  Act 
that  was  passed  and  approved  on  October  5,  1918,  and  this  legislation 
was  somewhat  the  outgrowth  of  that.  We  held  hearings  to  determine 
what  kind  of  legislation  should  be  enacted  in  regard  to  these  minerals, — 
"War  Minerals"  they  were  termed.  There  were  some  50  of  them,  50 
minerals  that  were  named  in  the  bill,  and  it  was  deemed  by  a  great  many 
that  there  should  be  a  stimulation  of  those  in  some  way.  Of  course, 
you  know  as  the  law  is,  and  as  the  safe-guards  of  the  Constitution  are, 
no  Cabinet  Officer,  even,  has  a  right  to  obligate  the  Government  to  pay 
anything  unless  authorized  by  Congress,  and  we  were  trying  to  pass  a 
law  that  would  enable  the  Secretary  of  the  Interior  and  these  War 
Mineral  Boards  to  make  some  kind  of  a  contract  by  which  the  production 
would  be  increased.  The  bill  was  passed  in  the  House  of  Representatives 
in  May,  1918,  and  it  then  came  over  to  the  Senate.  It  had  some  clauses 
in  it  that  the  Committee  on  Mines  and  Mining  of  the  Senate  did  not  like. 
It  had  a  price-fixing  and  license  provision  in  it.  The  Committee  thought 
that  as  price  fixing  and  licensing  had  not  operated  well,  it  would  be  a 
hamper  to  the  mining  men  to  have  those  provisions  placed  in  it. 

Authority  Fixed 

At  last  there  was  enacted  and  passed  by  the  Senate  a  law  that  per- 
mitted contracts  to  be  made  by  certain  officers  of  the  Government  to 


THE  AMERICAN  MINING  CONGRESS  71 

agree  for  so  many  tons  of  the  50  minerals  for  war  purposes,  or  for  the 
Government's  use,  and  prices  were  to  be  paid  as  fixed  in  the  contracts 
between  the  producer  and  the  Government.  Those  prices  were  to  prevail 
for  an  agreed  length  of  time,  not  exceeding  two  years  after  the  war 
closed.  The  production  was  to  be  based  upon  contract. 

President  Didn't  Agree 

Now,  the  President  did  not  deem  that  it  was  wise,  inasmuch  as  that  law 
was  passed  and  approved  on  October  5,  1918,  that  there  should  be  any 
contracts  made  under  it,  because  he  evidently  had  an  idea  that  the 
war  was  going  to  close.  He  did  not  want  to  obligate  the  Government 
to  pay  millions  of  dollars  (the  extent  of  the  appropriation  being  fifty 
million  dollars),  and  for  that  reason  he  did  not  appoint  any  of  the 
officers  that  were  necessary  to  carry  out  the  provisions  of  that  Act.  That 
was  the  situation  when  the  armistice  came.  By  reason  of  some  specific 
requests  and  other  published  requests,  miners  had  been  encouraged  to 
produce  some  of  these  minerals.  As  a  member  of  the  Committee  on  Mines 
and  Mining,  I  voted  to  approve  and  to  report  out  of  the  Committee,  what 
is  called  the  "Henderson  Amendment,"  which  is  this  very  measure  that 
crystallized  into  the  Act  under  which  claims  are  filed.  As  it  was  reported 
to  the  Senate,  it  was  a  measure  that  permitted  requests  of  a  public 
nature  to  be  considered  as  sufficient,  and  I  will  say  that  Congressman 
Foster  also  favored  that  proposition,  that  is,  he  was  in  favor  of  the 
passage  of  a  bill  which  provided  a  request  should  be  made,  and  that  that 
request  need  not  be  a  specific  request,  but  that  it  might  be  something 
that  the  party  could  act  upon  in  the  nature  of  an  appeal  or  a  published 
request  to  produce  these  50  War  Minerals. 

Relief  Measure  Adopted 

The  Senate  passed  that  measure,  and  when  it  got  back  to  the  House 
in  a  conference  report,  there  is  where  the  difficulty  occurred.  The  House, 
upon  the  conference  report,  disapproved  of  the  Senate  Amendment,  and 
there  was  98  majority  against  any  such  measure  going  through.  A 
great  many  of  the  members  said:  "Why,  we  cannot  consent  to  a  propo- 
sition of  this  kind,  because  the  limitations  are  so  few,"  and  they  rejected 
it.  It  went  to  conference  again  and  the  conference  came  back,  and  the 
House,  by  a  less  majority,  voted  against  the  passage  of  any  measure 
for  the  relief  of  the  persons  who  had  produced  War  Minerals. 

Mr.  Foster,  who  was  one  of  our  Commissioners,  was  the  chairman  of 
the  Committee  on  Mines  and  Mining  of  the  House. 

The  Committee  on  Mines  and  Mining  of  the  House  called  a  meeting 
of  their  Committee  and  said:  "While  this  has  not  been  considered  by  the 
Committee  on  Mines  and  Mining  of  the  House,  we  think  it  ought  to  be," 
and  so  the  members  of  that  Committee  got  together  in  that  desperate 
condition  of  the  legislation  and  began  to  place,  as  they  termed  it,  safe- 
guards upon  the  amendment,  and  thereupon  they  reported  a  measure 
which  afterward  became  this  law. 


72  REPORT  OF  PROCEEDINGS 

Attempt  to  Liberalize  Failed 

Upon  that  matter  I  can  say  that  Mr.  Foster,  on  the  two  previous  occa- 
sions when  the  conference  report  was  before  the  House,  tried  his  best 
to  get  the  Senate  provisions  passed  that  stipulated  for  a  public  request, 
but  he  failed  because  the  House  leaders  were  opposed  to  that  kind  of  a 
provision,  and  so  they  beat  him  upon  a  test  vote  twice.  So  when  the 
Committee  on  Mines  and  Mining  of  the  House  came  in,  they  proposed 
certain  amendments  which  they  thought  possibly  would  let  the  bill  go 
through,  and  those  provisions  are  voiced  in  the  legislation  that  actually 
did  pass.  One  of  the  first  ones  was  in  regard  to  the  request,  and  the  pro- 
vision which  was  inserted  in  the  measure  was  as  follows:  "That  the 
Secretary  of  the  Interior  be,  and  he  hereby  is  authorized,  to  adjust,  liqui- 
date and  pay  such  net  losses  as  have  been  suffered  by  any  person,  firm 
or  corporation  by  reason  of  producing  or  preparing  to  produce  either 
manganese,  chrome,  pyrites  or  tungsten,  in  compliance  with  the  request 
or  demand  of  the  Department  of  the  Interior,  the  War  Industries  Board, 
the  War  Trade  Board,  the  Shipping  Board  or  the  Emergency  Fleet 
Corporation  to  supply  the  urgent  needs  of  the  nation  in  the  prosecution 
of  the  war."  That  is  the  provision  which  was  inserted  and  which  became 
the  law. 

Some  Inside  History 

There  was  a  discussion  in  Congress  concerning  it,  and  that  discussion 
developed  certain  things  which  I  want  to  call  to  your  attention.  Mr. 
Foster  had  been  in  favor  of  a  published  request,  the  Secretary  of  the 
Interior  had  approved  the  bill  as  it  passed  the  Senate.  The  Mining 
Bureau  of  the  Interior  Department  had  approved  that,  or  rather  had 
approved  the  Henderson  Amendment,  which  is  the  original  or  the  incep- 
tion of  the  very  provision  which  became  the  law. 

Now,  then,  we  find  that  there  was  a  hot  discussion  in  Congress  as  to 
whether  or  not  there  should  be  any  relief  given.  Members  were  contend- 
ing that  the  departments  of  the  Government  had  said:  "Food  will  win 
the  war,  and  it  is  the  duty  of  every  patriotic  citizen  to  go  out  and  pro- 
duce food,  raise  stock,  and  things  of  that  kind."  Some  representatives 
from  the  agricultural  sections  said:  "There  was  a  drouth  in  parts  of  this 
country,  and  the  man  who  planted  corn,  barley,  rye  and  various  crops,  lost 
all,  and  he  is  not  appealing  to  the  Government  to  have  his  losses  reim- 
bursed." The  live  stock  people  said  they  met  with  some  losses  from 
extremely  cold  weather,  but  there  was  no  effort  to  reimburse  them, 
although  the  losses  were  sustained  without  any  fault  upon  their  part. 

Bill  Greatly  Modified 

That  was  the  condition  in  which  the  advocates  of  this  legislation  found 
the  situation,  and  from  that  condition  there  grew  this  discussion.  Com- 
missioner Foster  had  modified  this  law  to  such  extent  that  he  felt  it 
might  go  through  Congress,  but  that  it  would  have  no  show  whatever 
of  passage  and  no  relief  whatever  would  be  given  unless  these  modifica- 
tions were  made.  Consequently,  with  the  very  best  feeling  toward  the 
people  who  produced  minerals,  he  consented  to  these  amendments,  as  it 


THE  AMERICAN  MINING  CONGRESS  73 

was  the  only  thing  that  could  be  gotten  through,  and  the  session  of 
Congress  was  drawing  to  a  close.  This  Act  was  approved  on  March  2, 
1919,  just  two  days  before  the  final  adjournment  of  Congress. 

Attitude  of  Congress 

Now,  I  want  to  call  attention  to  what  was  said  with  relation  to  this 
request  matter,  because  it  is  one  of  the  things  that  people  unthinkingly 
may  say  was  never  intended  by  Congress.  I  will  not  attempt  to  read 
the  speeches  of  these  representatives,  but  I  will  read  just  a  little  extract 
from  what  Congressman  Foster  said  at  that  time.  He  was  endeavoring 
to  get  Congress  to  approve  this  legislation  with  the  modifications  because 
he  could  not  get  the  measure  through  without  the  modifications.  He 
said:  "This  also  names  but  four  minerals  which  the  Secretary  of  the 
Interior  through  the  Director  of  Mines  shall  pay  for.  It  does  not  take 
in  the  whole  scope  of  the  bill  and  put  in  all  the  minerals  that  were  there. 
The  Secretary  thinks  this  is  fair  and  just  for  these  four  minerals  to  be 
included.  No  account  is  taken  of  newspaper  articles."  That  is  the  com- 
ment of  the  chairman  who  framed  this  very  provision.  "Not  for  every 
fellow  who  went  out  and  dug  a  hole  in  the  ground,  but  he  must  be  able 
to  show  that  he  really  had  the  minerals  there;  not  a  prospecting  claim, 
nothing  of  that  kind,  but  only  the  actual  mineral  that  he  went  out  and 
secured  for  the  Government  when  his  Government  asked  him  to  do  it, 
when  his  Government  went  to  him  personally  and  requested  or  demanded 
that  he  do  it.  They  sent  for  many  of  these  men  to  come  to  Washington 
and  they  came  at  their  own  expense,  and  then  they  appealed  to  them  to 
go  home  and  to  do  this  work  for  their  Government,  which  was  vital  to 
the  winning  of  the  war." 

Of  course,  there  was  considerable  discussion  indulged  in  by  a  great 
many  members  of  Congress,  but  so  far,  the  quotation  is  the  words  of 
the  chairman  of  the  Committee  on  Mines  and  Mining  who  framed  the 
very  substitute  that  was  put  through.  It  becomes  very  important  to 
note  what  he  said,  because  the  Attorney-General,  in  rendering  his  opin- 
ion, evidently  took  into  consideration  not  only  the  language  that  was 
employed,  but  also  the  actual  history  of  the  bill  as  it  passed  through 
the  House  and  Senate. 

Attorney-General's  Opinion 

The  Attorney-General  has  rendered  an  interpretation  of  that  pro- 
vision, and  he  says  it  must  be  a  specific  request.  He  says  that  there 
has  to  be  a  request  by  certain  officers  on  the  theory  that  men  had  been 
sent  out  to  the  mines,  and  on  the  theory,  at  least,  so  far  as  Congress  is 
concerned,  that  unless  certain  officers  requested  a  production,  that  it 
would  not  be  considered  anything  more  than  a  general  appeal,  and  the 
Attorney-General  has  said  that  a  general  appeal  cannot  be  the  basis  of 
liability  of  the  Government.  His  opinion  is  of  July  1,  1919. 

Now,  it  must  also  be  noted  that  in  this  legislation,  as  it  passed  the 
Senate,  the  word  "published"  request  was  in.  It  contains  the  following: 
"No  claim  based  upon  a  general  appeal  or  solicitation  is  authorized  by 


74  REPORT  OF  PROCEEDINGS 

it;  but  to  come  under  the  statute,  the  claimant  must  have  been  asked 
specifically  by  either  the  Department  of  the  Interior,  the  War  Industries 
Board,  the  War  Trade  Board,  the  Shipping  Board  or  the  Emergency  Fleet 
Corporation  to  produce  or  to  prepare  to  produce  one  or  more  of  the  four 
named  minerals."  But  when  this  amendment  passed  the  House  the  word 
"published"  request  had  been  stricken  out.  These  Congressmen  must  not 
be  blamed  for  that  amendment,  because  they  were  doing  the  best  they 
could,  believing  that  otherwise  it  would  not  become  a  law.  The  Attorney- 
General  took  that  into  consideration  when  he  decided  that  the  request 
must  not  be  of  a  general  nature  but  must  be  a  specific  request  from 
some  of  these  Boards  or  the  Interior  Department  to  the  man  producing, 
not  to  some  one  else. 

Bound  By  Rulings 

The  Commission  has  found  that  it  is  imperative  upon  us  to  follow  that 
decision.  The  matter  was  not  submitted  to  the  Attorney-General  by  the 
Commission.  It  was  submitted  when  the  Commission  was  in  California 
taking  testimony,  and  we  knew  nothing  of  it  until  the  dispatch  concerning 
the  same  was  carried  in  the  newspapers.  It  is  very  natural  and  proper 
that  the  Attorney-General  should  construe  laws  passed  by  Congress,  and 
he  does  it  with  a  pure  motive  of  duty. 

You  will  notice  in  the  interpretation  that  has  been  placed  by  the  Com- 
mission that  it  has  avoided  the  technical  features  of  this  request  as 
much  as  it  was  possible.  For  instance,  whenever  a  dispute  has  occurred 
as  to  whether  there  was  a  request  by  some  officer  of  the  Government, 
and  it  is  admitted  by  the  officer  who  went  to  the  mines  that  he  had 
some  kind  of  a  talk  with  the  claimant  encouraging  production,  I  think 
we  have  in  every  instance  said  that  that  is  a  request  under  the  Act — 
the  officer  saying:  "I  talked  generally  and  did  not  make  a  special  request," 
and  the  other  man  saying  he  did  make  a  special  request.  We  have  never 
required  confirmation  of  that.  We  have  taken  the  position  that  where 
an  officer  is  sent  out  by  the  Department  to  stimulate  production,  although 
he  did  not  use  the  words  which  the  Attorney- General  had  said,  yet  if  its 
effect  was  so  understood  by  the  claimant,  it  was  a  request  within  the 
contemplation  of  the  statute. 

The  provision  says:  "The  War  Minerals  Board."  Now,  you  know 
what  kind  of  a  request,  technically,  can  be  invoked  in  a  case  of  that  kind. 
You  know  that  it  takes  the  passage  of  a  resolution  of  a  Board  of  Directors., 
We  do  not  believe  Congress  intended  that;  we  have  not  held  to  that;  we 
have  not  put  the  technical  features  of  that  into  effect  at  all;  we  have 
said  that  if  any  director  of  any  of  these  agencies  that  are  named  in  the 
Act,  namely,  the  War  Minerals  Board,  the  War  Trade  Board,  the  Ship- 
ping Board  or  the  Emergency  Fleet  Corporation,  any  of  them,  or  any 
director  of  them,  or  any  secretary  of  them,  should  make  a  request,  it 
was  sufficient. 

Consequently,  we  have  construed  that  this  Act  was  not  intended  to  be 
construed  so  as  to  require  the  request  should  be  made  at  a  meeting  of 
the  War  Industries  Board  and  a  resolution  passed  by  the  War  Industries 
Board  making  such  request  to  produce  chrome  or  manganese. 


THE  AMERICAN  MINING  CONGRESS  75 

Claimed  Liberal  Administration 

So  far  as  technicalities  are  concerned,  we  have  construed  the  Act 
liberally.  Not  only  that,  but  we  have  construed  that  every  man  who 
was  connected  with  the  Bureau  of  Mines,  or  connected  with  the  Geological 
Survey,  could  make  a  request,  and  that  the  request  of  a  field  inquirer, 
not  a  chief,  was  the  request  of  the  Interior  Department.  We  have  held 
in  every  one  of  those  instances  that  that  was  a  sufficient  request,  instead 
of  following  a  technical  rule  that  it  must  be  by  head  engineer,  by  the 
Secretary  of  the  Interior  himself  or  by  the  Director  of  the  Bureau  of 
Mines,  or  the  Director  of  the  Geological  Survey.  We  have  said  that  these 
men,  in  the  nature  of  inspectors,  who  were  not  sent  out  with  the  pur- 
pose of  saying  to  a  man:  "You  shall  do  this,"  or  "you  are  requested  to 
do  this,"  yet  if  his  talk  led  the  claimant  to  believe  it  was  a  request,  we 
have  held  that  is  sufficient. 

No  Power  to  Modify  Law 

The  majority  of  the  Commission  are  not  lawyers.  We  have  no  power 
to  make  any  law,  no  power  to  modify  any  law,  we  have  to  take  the  law 
as  we  find  it  and  as  construed  by  the  Attorney-General,  and  if  we  do  not 
do  that  we  violate  our  oaths  of  office. 

Now,  what  are  these  cases  that  we  have  been  deciding?  A  question 
is  asked  whether  or  not  they  were  requested  to  produce,  and  if  so,  by 
whom;  when,  where,  and  who  were  present.  In,  I  think,  nine  cases  out 
of  ten  upon  the  question,  the  man  himself — the  claimant — has  said:  "No, 
no  Government  official  of  any  kind  requested  him  to  produce."  What  can 
you  do?  Is  it  possible  that  you  are  going  to  disregard  his  statement, 
disregard  the  law  and  allow  a  man,  notwithstanding  that  fact,  especially 
when  Congress  absolutely  struck  out  the  word  "published"  and  made  the 
law  as  construed  by  the  Attorney-General,  to  be  a  specific  request.  That 
is  the  situation  as  to  probably  400  of  the  cases  that  have  been  decided 
up  to  this  time. 

Commercial  Importance  Decided 

The  Commission,  I  may  say,  has  been  doing  constant  work,  has  been 
doing  hard  work.  We  work  more  hours  than  any  officers  in  the  Interior 
Department.  We  get  there  early  and  we  leave  late;  and  the  stenog- 
raphers, we  have  it  so  half  of  them  get  there  an  hour  later  than  we  get 
there  in  order  that  they  may  stay  an  hour  later  than  the  ordinary  force 
in  the  Department. 

Some  of  the  cases  have  been  decided  upon  the  question  of  commer- 
cial importance  of  the  mine.  The  theory  of  Congress  was  what?  It 
was  to  the  effect  that  it  did  not  want  production  from  people  who  were 
merely  to  go  out  and  prospect,  because  it  would  take  time.  An  ordi- 
nary prospector  to  go  out  must  pass  three,  four  or  five  months  in  try- 
ing to  find  the  ore  body,  and  they  said :  "This  war  is  so  urgent  we  are 
going  to  appeal  to  people  who  have  already  got  mines,  the  ore  bodies 
of  which  are  ascertained,  because  we  will  save  that  three,  four  or  five 
months,  or  sometimes  a  year  in  trying  to  find  the  ore  body,"  and  on  that 


76  REPORT  OF  PROCEEDINGS 

I 

account  Congress  has  said  that  there  should  be  a  limitation  of  that  kind 
or  no  legislation  can  be  passed. 

Upon  that  provision  the  question  arose  before  the  Commission  as  to 
what  should  be  done.  Now,  this  is  a  prohibitive  clause;  it  is  not  a  mere 
direction,  it  is  not  something  that  is  discretionary,  it  is  absolutely  manda- 
tory, and  what  is  the  wording  of  it?:  "That  no  claim  should  be  allowed 
or  paid  by  said  secretary  unless  it  shall  appear  to  the  satisfaction  of  the 
said  secretary  that  the  expenditure  so  made  or  obligation  so  incurred  by 
the  claimant  was  made  in  good  faith,  for  or  upon  property  which  con- 
tained either  manganese,  chrome,  pyrites  or  tungsten  in  sufficient  quan- 
tities to  be  of  commercial  importance."  That  is,  Congress  wanted  the 
people  who  had  mines,  not  prospectors,  to  produce. 

It  is  shown  that  there  was  a  good  deal  of  loose  talk  about  "go  out 
and  discover  mines,"  but  Congress  said:  "No,  we  will  make  this  limitation 
because  it  is  right,  and  unless  you  make  the  limitation  you  will  not  get 
any  Act  passed."  Congressman  Foster  had  been  in  favor  of  the  other 
provision,  taking  in  prospectors  and  all.  I  voted  that  way  in  the  Senate, 
but  when  it  came  to  the  House  of  Representatives,  controlled  by  a 
majority  of  98  members  against  the  Senate  measure,  you  can  readily 
see  that  they  would  not  pass  this  law  at  all  in  that  form.  Members 
favorable  to  the  Senate  measure  had  to  make  some  modifications,  and 
that  was  one  of  the  modifications. 

Allowing  Purchase  Price 

Now,  there  has  been  a  reference  made  in  regard  to  the  Commission  not 
allowing  for  the  purchase  price  of  mines,  and  there  has  been  some  state- 
ment that  it  should  be  allowed.  When  you  take  into  consideration  what 
was  said  in  Congress  you  cannot  come  to  any  other  conclusion  than  that 
the  ruling  of  the  Commission  is  right,  and  why?  Because  the  measure 
as  it  was  introduced  in  the  Senate  contained  a  clause  that  if  the  money 
was  spent  in  acquiring  property  that  it  should  be  allowed.  The  measure 
in  the  Senate  enumerated  it  as  one  of  the  clauses,  but  after  a  Senator 
objected  and  said  it  would  not  do  to  permit  that,  that  the  buying  of  a 
mine  is  a  permanent  investment,  and  therefore  an  allowance  of  that  kind 
should  not  be  made,  it  was  stricken  out.  The  Commission  has  no  right 
to  ignore  that  action  of  the  Senate.  Here  is  what  was  said  by  a  dis- 
tinguished Senator  on  January  28,  1919,  in  the  Senate: 

Quoting  Mr.  Smoot 

"Mr.  President,  I  notice  this  amendment  authorizes  the  Secretary  of 
the  Interior  to  ascertain  and  determine  the  amount  or  amounts  of  money 
heretofore  invested  or  contracted  to  be  invested,  and  obligations  incurred 
by  any  and  all  persons  and  investors  for  the  purpose  of  producing  or 
preparing  to  produce,  or  acquiring  property  for  producing  within  the 
United  States,  as  applied  to  the  urgent  published  needs  of  the  nation. 
I  want  to  call  the  attention  of  the  Senator  from  Nevada  to  the  words 
'or  acquiring  property  for  producing.'  It  seems  to  me  that  is  going  too 
far.  I  think,  where  a  man  has  purchased  a  piece  of  property  for  pro- 


THE  AMERICAN  MINING  CONGRESS  77 

ducing  these  metals,  we  should  not  authorize  the  Secretary  to  go  into 
the  question  as  to  what  he  paid  and  whether  he  lost  upon  the  purchase 
price  of  the  property  because  of  the  fact  that  the  war  closed  sooner  than 
he  anticipated.  I  believe  that  is  going  altogether  too  far.  I  will  ask 
the  Senator  if  it  would  not  be  better  to  strike  out  the  words  'or  acquiring 
property  for  producing?'  And  the  answer  was,  'I  will  consent  to  that, 
Mr.  President/  " 

Cut  Out  Purchase  of  Lands 

Now,  this  legislation  was  being  considered  at  a  delicate  time  so  far  as 
getting  legislation  through  the  Senate.  During  the  short  session  it  is 
almost  impossible  to  get  measures  through  unless  you  consent  to  pretty 
near  any  amendment  that  any  one  Senator  wants,  and  by  reason  of  that, 
you  can  readily  see  that  although  the  Senator  from  Nevada  felt  that 
ought  to  be  in  there  because  the  members  of  the  Committee  on  Mines 
and  Mining  had  so  reported  it,  yet  here  was  something  that  jeopardized 
the  very  bill  itself,  and  so  he  made  that  concession. 

The  bill  as  it  passed  ultimately  in  the  House,  did  not  contain  "or 
acquiring  property  for  producing,"  so  the  ruling  of  the  Commission 
absolutely  is  in  accordance  with  the  law. 

There  have  been  some  people  who  have  said  there  is  another  part  to 
the- bill,  sanctioning  such  allowance  in  the  words  "for  or  upon  property." 
But,  if  you  strike  out  the  word  "for"  and  leave  it  "upon  the  property," 
you  can  readily  see  what  a  disastrous  effect  it  would  have  upon  men  who 
have  claims.  A  road  has  to  be  built,  it  is  not  upon  the  property  at  all, 
it  is  down  in  the  valley,  it  is  for  the  property,  for  the  benefit  of  the 
property,  it  is  not  upon  the  property.  If  it  were  not  upon  the  prop- 
erty, and  this  limitation  had  been  put  in  and  left  only  "upon  the 
property,"  all  of  the  road  bills  which  we  are  allowing  in  claims  would 
have  to  be  stricken  out.  The  Commission  would  have  been  compelled 
to  say:  "Well,  it  was  not  upon  the  property  and  on  that  account  you  are 
not  entitled  to  it." 

Now,  you  know  nearly  every  mine  has  a  tram  leading  from  the  mine 
down  to  a  railroad  or  down  to  a  place  where  it  is  convenient  to  load  for 
shipment,  that  is  not  upon  the  property,  a  very  small  part  of  it  is  upon 
the  property,  but  the  tram  is  for  the  property,  it  is  for  the  benefit  of  the 
property. 

Take  the  transfer  of  electrical  power  to  the  mine.  The  wires  are 
not  on  the  mine  the  claimant  operates,  it  is  on  the  land  that  is  far  from 
it,  and  yet  you  can  readily  see  that  if  Congress  had  stricken  out  that 
word  "for"  and  left  it  "upon  the  property"  alone,  the  Commission  would 
have  been  compelled  to  say:  "These  lines  are  not  on  the  property,  and, 
therefore,  not  an  expense  for  which  the  Government  is  chargeable  under 
this  statute."  So,  you  can  see  good  reason  why  that  word  "for"  was 
left  in  the  measure  after  the  words  "or  acquiring  property  for  produc- 
ing" had  been  stricken  out. 

Take  the  construction  of  an  ore  bin  at  the  railroad  or  place  for  dump- 
ing the  ore  into  the  car.  It  is  sometimes  not  within  ten  miles  of  the 


78  REPORT  OP  PROCEEDINGS 

mine,  it  is  not  upon  the  mine.    It  is  for  the  mine  that  is  operated,  because 
it  is  one  of  the  necessary  things  to  get  the  ore  to  market. 

Claimants  Wanted  Purchase  Price 

One  of  the  first  cases  we  had  was  one  that  proposed  that  the  Govern- 
ment should  pay  $75,000  for  the  purchase  of  the  mine.  The  parties  that 
operated  first  under  a  lease  evidently  felt  that  they  had  a  good  thing,  and 
they  wanted  to  acquire  the  title  to  the  property,  and  they  entered  into  an 
agreement  by  which  they  were  to  pay  $75,000  for  the  mine.  Considering 
that  the  clause  "or  acquiring  property  for  producing"  was  stricken  out  of 
the  bill,  that  it  was  absolutely  eliminated,  you  can  readily  see  that  we 
would  have  been  derelict  in  our  duty  in  allowing  $75,000  against  the 
Government,  when  they  had  made  a  contract,  changing  the  leasing  con- 
tract to  a  buying  contract. 

The  position  which  the  Commission  has  taken  is  not  because  the  clause 
'was  stricken  from  the  Act  only,  but  also  because  acquiring  a  fee  simple 
title  to  property  indicates  permanent  investment  and  not  for  the  purpose 
of  supplying  the  needs  of  the  market  temporarily  during  the  war. 

There  is  another  claim  for  the  Government  to  pay  $500,000  for  the 
purchase  of  a  mine  which  is  to  be  paid  for  in  five  annual  installments. 
It  would  not  be  likely  that  that  kind  of  investment  was  intended  only 
for  the  temporary  purpose  of  producing  minerals  during  the  period  of  the 
war.  When  men  undertake  things  of  that  kind  it  is  generally  for  a 
permanent  investment,  and  by  reason  of  that,  does  not  come  within  the 
contemplation  of  the  Act. 

Claims  for  Salary 

Now,  there  are  some  other  matters  that  I  want  to  call  attention  to, 
because  we  have  studied  this  Act  and  studied  it  with  a  view  of  trying 
to  do  what  is  just  and  what  is  fair  between  all  the  parties. 

There  is  another  decision  for  which  we  have  probably  been  criticised, 
and  that  is  for  the  allowance  of  no  salary  where  a  man  is  working  for 
himself.  Now,  that  is  not  usually  the  way,  when  a  man  undertakes 
some  business  to  charge  a  salary  for  himself.  One  of  the  first  cases 
we  had  was  one  charging  a  salary  of  $1,000  a  month.  It  would  not  be 
right  to  the  other  claimants  that  are  going  to  get  some  interest  in  this 
appropriation  to  allow  it.  If  a  man  owns  a  business,  usually,  he  does 
not  charge  himself  with  a  salary.  As  he  is  entitled  to  all  the  gains  and 
profits,  failure  to  get  a  salary  is  failure  to  make  a  profit,  which  the  law 
does  not  recognize.  Therefore,  it  is  not  counted  that  a  salary  is  a  proper 
charge.  We  do  hold  that  when  a  man  has  given  his  services,  even  to 
himself,  he  is  entitled  to  live.  He  is  entitled  to  a  reasonable  subsistence 
charge,  he  is  entitled  to  all  his  traveling  expenses,  he  is  entitled  to  every- 
thing that  goes  to  make  up  what  is  expended  in  an  ordinary  business, 
where  a  man  is  conducting  his  own  business.  In  the  case  of  a  corpora- 
tion, where  the  corporation  is  not  owned  entirely  by  one,  two  or  three 
persons,  we  generally  allow  whatever  it  actually  paid  in  the  way  of 
salaries.  We  cannot  say  that  that  should  always  be  the  rule,  because  it 


THE  AMERICAN  MINING  CONGRESS  79 

might  be  that  some  corporation  might  want  to  give  ten,  fifteen  or  twenty 
thousand  dollars  a  year  as  a  salary,  but  we  have  not,  so  far,  questioned 
the  power  of  the  corporation  to  give  to  persons  that  are  not  the  owners 
of  the  stock  a  reasonable  salary.  We  have  regarded  these  expenditures 
as  proper  in  the  matter  of  producing  or  preparing  to  produce  these 
minerals. 

These  are  the  rulings  that  we  have  made  and  the  only  ones  upon  which 
I  have  heard  of  any  criticism. 

Commercial  Production 

Now,  in  regard  to  the  rule  of  commercial  importance  of  the  mine  re- 
quired under  the  statute,  we  have  held  as  liberally  as  we  could  and 
adhered  to  the  law.  We  have  held,  even,  that  where  the  mine  is  not  of 
commercial  importance,  if  an  agent  of  the  Government  went  to  tha 
miner  and  said  "You  produce  from  that  mine,"  the  Government  should 
not  deny  that  it  is  of  commercial  importance.  In  other  words,  we  have 
said  that,  if  the  Government  through  an  officer  who  ought  to  know  has 
gone  there  and  said  "That  mine  is  capable  of  being  worked  at  a  profit, 
and,  therefore,  you  work  it,"  it  would  be  inequitable  for  the  Government 
to  say:  "No,  we  will  not  allow  for  that  claim,  because  it  did  not  produce 
well."  We  have  had  a  case  where  the  Government  mining  engineer  now 
says  the  mine  is  not  of  commercial  importance,  that  there  never  was 
sufficient  ore,  but  when  it  was  shown  that  the  agent  of  the  Department 
went  there  and  looked  at  the  mine  and  said  "Produce,"  we  held  that 
the  Government  was  estopped  from  denying  that  it  was  of  commercial 
importance. 

Request  or  Demand 

Now,  in  regard  to  the  "Request."  We  have  construed  the  law  to  be 
this:  If  one  of  the  agents  of  the  Bureau  of  Mines  or  Geological  Survey 
says  that  he  went  to  a  mine  and  had  a  general  talk  with  the  proprietor 
or  manager  about  the  mine,  although  he  may  say  "I  did  not  use  the 
word  'request,'  or  intend  to  request,  but  I  did  encourage,"  we  held  that 
it  is  a  request,  and  that,  therefore,  the  Government  is  liable.  There 
are  a  number  of  those  cases.  Although  we  could  have  construed  the 
evidence  the  other  way,  we  have  been  as  liberal  in  the  construction  in  this 
respect  as  we  possibly  could  be. 

What  are  "Net  Losses"? 

There  is  a  question  of  profits.  You  know  the  Act  says  the  "net  losses" 
only  can  be  considered,  and  there  are  some  men  engaged  in  the  business 
who  made  enormous  profits  before  the  war.  We  have  held  invariably  that 
the  men  who  made  those  profits  before  April  6,  1917,  are  entitled  to  them, 
and  that,  therefore,  they  are  entitled  to  their  losses  sustained  during  the 
war. 

We  have  also  made  a  ruling  of  this  kind — where  a  man  has  several 
operations  that  are  going  on,  and  he  made  a  large  profit  in  one  mine, 


80  REPORT  OF  PROCEEDINGS 

and  in  the  second,  third  and  fourth  mines  he  lost,  we  have  held  that 
the  words  "net  losses"  means  the  balancing  of  accounts  as  to  all  opera- 
tions, that  he  cannot  pick  out  one  mine  where  there  was  a  loss  and  say: 
"That  is  the  only  one  I  am  claiming  for."  It  would  be  inequitable  to  the 
Government  to  allow  that,  and  for  that  reason,  we  have  held  that  within 
the  contemplation  of  the  Act,  we  must  take  into  consideration  all  his 
operations.  Congress  would  never  have  passed  any  law  upon  the  subject 
if  the  operators  had  made  more  than  they  lost,  even  if  they  did  lose  on 
some  mines.  They  cannot  pick  out  the  claim  in  which  they  lost  and  not 
refer  to  the  claim  where  they  made  profits. 

Question  of  Profits 

We  have  also  considered  this.  The  question  arose  as  to  whether  a  man 
who  deals  in  ore,  not  a  producer,  not  a  man  who  digs  the  mineral  out 
of  the  ground,  but  who  goes  out  into  the  market  and  buys  ore  and  sells 
it  and  makes  a  profit  should  account  for  profits.  We  have  held  that  he  is 
entitled  to  that  profit,  and  we  have  also  held  that  losses  cannot  be  pred- 
icated upon  such  transactions.  In  other  words,  the  operation  of  pro- 
ducing, not  the  operation  of  buying,  can  be  considered,  and  for  that  reason 
a  man  has  a  perfect  right  to  make  money  in  buying  ores  and  selling  ores, 
and  such  business  does  not  come  within  the  contemplation  of  this  Act, 
no  matter  how  much  profit  he  makes. 

Of  course,  there  was  a  feeling  among  some  that  the  profits  should 
Include  the  purchase  as  well  as  the  producing  of  ores,  but  we  have  not 
so  held. 

Specific  Request 

Where  there  has  been  a  dispute  as  to  when  a  request  was  made,  the 
date  of  the  request,  we  have  in  every  instance  that  I  remember,  taken 
the  earlier  date,  unless  it  was  negative  by  the  field  officer  of  the  Gov- 
ernment in  such  a  way  as  this.  If,  for  instance,  it  was  said  that  there 
was  in  the  State  of  Oregon  a  request,  and  the  questionaire  is  unusually 
indefinite  or  very  indirect  and  vague  upon  the  matter,  as  claimants  often 
say:  "In  the  summer  of  1918."  Well,  the  summer  is  a  three  months' 
period,  or,  "In  the  year  1918,"  and  then  when  the  field  officer  says:  "I 
have  a  diary  which  says  exactly  when  I  arrived  at  the  mine  and  how 
long  I  stayed  there,"  we  then  take  the  statement  of  the  engineer  in  regard 
to  the  date,  and  you  can  readily  see  that  is  the  only  safe  way  to  do. 
We  will  give  the  claimant  an  opportunity  to  refute  it  if  he  can.  The  field 
officer  is  charged  with  doing  exact  justice  to  everybody  and  not  to  in 
any  manner  exaggerate  one  way  or  the  other  in  these  cases. 

So  far  as  liberal  construction  is  concerned,  if  we  make  a  decision  and 
the  party  comes  and  says:  "I  have  found  out  since  the  decision  that  there 
was  a  request  at  a  certain  time,"  we  invariably  will  reopen  the  case. 
We  have  done  that  in  a  number  of  instances,  although  the  testimony 
had  been  closed  and  the  opinion  has  been  rendered,  but  we  believe  sub- 
stantial justice  ought  to  be  done,  and  for  that  reason  there  should  be  no 
such  thing  as  a  technical  limitation. 


THE  AMERICAN  MINING  CONGRESS  81 

Claims  Received  Too  Late 

Now,  there  is  a  limitation  which  is  very  hard,  but  which  is  necessary 
to  invoke.  There  are  about  50  cases  where  men  sent  their  questionaires 
and  their  claims  to  the  Interior  Department  after  the  second  day  of  June. 
The  Act  says,  as  you  know,  that  the  Secretary  shall  not  consider  any 
claims  after  that  time,  and  we  have  been  endeavoring  to  see  whether 
or  not  we  have  the  power  to  extend  time  in  that  line,  but  you  can  see 
from  the  language  used  that  it  is  impossible  to  do  it.  "The  said  Secre- 
tary shall  consider,  approve  and  dispose  of  only  such  claims  as  shall  be 
made  hereunder,  and  filed  with  the  Department  of  the  Interior  within 
three  months  from  and  after  the  approval  of  this  Act."  He  is  prohibited, 
he  could  be  impeached  if  he  allowed  those  claims  in  violation  of  that 
Act  of  Congress,  and  unless  Congress  gives  some  relief  these  claims  must 
fall.  We  did  everything  we  could  to  inform  people  that  they  must  be 
filed  by  the  second  day  of  June.  We  did  everything  in  the  way  of  keeping 
the  office  open  until  12  o'clock  at  night  of  that  day,  although  the  decisions 
are  to  the  effect  that  the  instrument  must  be  filed  within  the  office  hours 
of  a  department  when  it  is  required  to  be  done  within  a  certain  time. 
The  Controller  of  the  Currency  has  decided  in  numerous  cases  as  to  pay- 
ing claims  which  were  filed  after  the  time  fixed  by  Congress,  that  there 
is  no  authority  to  pay  it  after  the  time  has  expired.  Not  only  that, 
but  we  sent  men  to  the  Post  Office  Department  for  the  purpose  of  getting 
mail  at  the  last  minute,  that  it  could  be  gotten  to  the  Department  within 
that  time. 

We  are  holding,  also,  that  where  one  of  these  Boards  named  in  the 
Act  has  told  a  man — although  he  is  not  connected  with  the  Government — 
to  go  out  and  ask  people  to  produce,  that  such  request  is  valid. 

Must  Obey  the  Law 

These  are  facts,  the  difficulties  we  have  had.  The  Commission  has  no 
purpose  or  object  in  depriving  anybody  of  their  claims,  at  the  same  time, 
it  is  bound  to  obey  the  law.  When  the  law  says  a  certain  thing  it  has  to 
be  lived  up  to  by  the  Commission  or  we  do  not  do  our  duty.  Under  those 
circumstances  we  submit  that  there  has  been  a  faithful  and  fair  adminis- 
tration of  the  Act.  Now,  I  will  say  that  we  have  gotten  through  465 
cases  that  have  been  decided  since  we  have  returned  from  the  California 
and  Oregon  hearings.  Four-fifths  of  the  claims  were  not  filed  until 
a  few  days  before  we  left  for  the  West  to  hold  hearings. 

Examination  Slow  Process 

A  mining  engineer  has  to  be  sent  to  examine  the  mine;  an  auditor 
has  to  be  sent  to  audit  the  books  of  the  claimant.  If  you  think  those 
tasks  only  take  a  minute  or  two  you  are  sadly  mistaken.  They  involve 
sometimes  weeks  in  one  case.  In  the  first  case  we  spent  at  least  three 
weeks  in  determining  what  was  a  fair  adjustment  of  that  claim,  which 
amounts  to  some  $200,000.  This  takes  time.  There  are  1,206  cases,  464 
have  been  decided.  There  have  been  461  hearings,  some  of  which  involved 
all  day,  some  of  which  involved  five  or  six  days.  The  progress  has  been 


82  REPORT  OF  PROCEEDINGS 

such  that  we  ought  to  be  able  to  ascertain  in  the  course  of  several 
months  approximately  how  much  of  a  surplus  is  going  to  be  left  of 
the  appropriation,  and  Secretary  Lane  was  written  a  letter  to  the  effect 
that  if  this  data  comes  through,  then  he  can  determine  with  Congress 
as  to  what  kind  of  remedial  legislation  should  be  had  for  those  people 
who  did  not  have  a  request  from  the  Government. 

We  have  been  endeavoring  to  do  our  duty.  We  have  been  working 
hard.  We  work  one  hour  more  than  the  clerical  force  in  the  Depart- 
ment. We  have  no  interest  one  way  or  the  other.  We  try  to  serve  the 
Government  faithfully  and  we  try  to  recognize  the  just  claims  of  all 
claimants,  and  we  expect,  when  that  occurs,  if  we  do  that,  while  claimants 
may  not  be  satisfied,  that  the  public  will  feel  that  it  was  a  fair  and  proper 
administration  of  the  law.  (Applause.) 

Mr.  Moore,  another  member  of  the  Commission,  then  presented  an 
address,  which  appears  on  page  550. 

General  Discussion 

CHAIRMAN  VOORHEIS:  Gentlemen,  in  the  absence  of  Mr.  Edwards, 
who  was  to  lead  this  discussion,  Mr.  Smith  will  take  his  place. 

MR.  SMITH:  I  have  been  asked  by  several  War  Mineral  producers 
for  the  purpose  of  opening  the  general  discussion,  to  make  an  excerpt 
from  a  statement  I  made  to  the  Committee  on  Mines  and  Mining  cov- 
ering my  digest  of  the  decisions  of  the  Commission  as  based  on  par- 
ticular features  of  vital  importance  in  the  War  Minerals  Relief  Bill,, 
as  shown  by  the  awards  at  hearings  in  particular  cases  which  have 
come  before  them,  so  I  will  give  this  brief  statement,  and  if  there 
are  any  points  in  it  in  which  I  have  misinterpreted  or  misquoted  the 
Commission  I  should  be  very  grateful  to  have  the  error  brought  to  our 
notice.  If  there  are  any  points  in  it  which  I  have  misquoted  or  misinter- 
preted the  decisions  as  they  have  applied  to  any  particular  claimant  or  in 
regard  to  any  case  with  which  he  is  familiar,  I  should  be  grateful  if  he 
would  tell  me. 

How  the  Commission  Formed 

Line  1:  The  words  "Secretary  of  the  Interior"  have  been  held  ta 
empower  the  Secretary  of  the  Interior  to  appoint  a  Commission,  which 
makes  recommendations  to  him  of  awards  to  be  made. 

The  body  of  this  Commission  is  made  up  briefly  as  follows: 

Three  Commissioners  (owing  to  the  recent  illness  and  death  of  Dr. 
Foster  only  two  Commissioners  are  now  active.  Another  is  to  be  ap- 
pointed, however).  A  chief  engineer,  under  whom  are  a  chief  accountant 
and  a  chief  field  engineer,  under  whom  are  respectively,  field  accountants 
and  field  engineers. 

These  field  engineers  examine  the  properties  and  the  accountants  verifjr 
the  records  and  statements  of  loss.  The  results  of  their  investigations 
are  submitted  to  an  examining  board,  which  makes  confidential  reports 


THE  AMERICAN  MINING  CONGRESS  83 

to  the  Commission.  The  Commissioners  make  a  recommendation  for  an 
award  to  the  Secretary  of  the  Interior,  a  copy  of  which  is  mailed  to  the 
claimant,  who  is  allowed  20  days  thereafter  in  which  to  file  a  written 
brief,  in  case  he  objects  to  the  recommendation  for  award.  If  the  recom- 
mendation is  agreed  to,  the  Secretary  of  the  Interior  issues  an  award  as 
recommended.  The  attorney  for  the  Interior  Department  issues  an  order 
on  the  Interior  Department  Auditor,  who,  in  turn,  issues  a  request  on 
the  Treasury  for  Treasury  warrant  or  check. 

Construction  Placed  On  Law 

Line  2:  "Net  Losses"  have  been  construed  as  follows:  A  claimant 
must  have  shown  a  net  loss  on  his  entire  War  Minerals  operation.  If  a 
claimant  owned  or  held  an  interest  in  a  property  of  any  nature  covered 
by  this  Act,  which  showed  a  profit,  regardless  of  location  or  length  of 
time  the  business  has  been  in  operation,  such  profit  applies  as  a  credit 
against  any  losses  sustained  in  any  other  properties,  because  of  Govern- 
ment stimulation,  and  for  which  he  has  filed  claim.  Only  so  much  will 
be  allowed  as  is  shown  to  be  actual  net  loss  from  his  entire  operation. 

Line  4 :  "Producing"  has  been  construed  to  mean  the  actual  production, 
as  raw  mineral  of  one  of  the  ores  of  the  four  metals  described  in  the  Act. 
Production  as  a  by-product  or  production  by  metallurgical  processes,  or 
by  intricate  milling  methods,  has  not  been  considered  basis  for  a  claim. 

"Preparing  to  produce"  has  been  construed  to  mean  the  expenditure 
entered  into  after  production  was  found  to  be  possible  and  profitable. 
No  expense  for  prospecting  or  development  of  properties  up  to  a  point 
where  ore  was  opened  up  in  marketable  quantities  has  been  allowed. 

Line  5:  "Compliance"  has  been  construed  to  mean  that  the  claimant 
must  have  altered  his  plans  in  accordance  with  the  request  or  demand 
of  the  Government.  If  a  claimant  was  engaged  in  production,  and  re- 
ceived urges  and  stimulation  to  continue  to  produce,  and  made  no  change 
in  his  plans,  it  has  been  decided  he  has  no  claim  for  loss.  If  a  claimant 
has  altered  his  plans,  and  so  comes  within  the  construction  of  this  pro- 
vision of  the  Act,  the  Commission  decides  what  percentage  of  the  claim- 
ant's activities  have  been  due  to  Government  stimulation  and  what 
percentage  due  to  the  original  plans.  He  is  only  allowed  such  percentage 
of  increased  activity  as  was  caused  by  Government  stimulation. 

The  "request  or  demand"  of  the  Department  of  the  Interior,  the  War 
Industries  Board,  the  War  Trade  Board,  the  Shipping  Board  or  the 
Emergency  Fleet  Corporation,  has  been  construed  by  the  Attorney-Gen- 
eral to  mean  that  the  claimant  must  have  been  asked  specifically  by  one 
of  these  five  Governmental  divisions  to  produce,  or  prepare  to  produce, 
such  minerals.  The  Commissioners,  in  turn,  in  construing  the  opinion 
of  the  Attorney-General,  have  written  letters  to  claimants  in  disallowing 
claims  in  which  the  following  statements  are  made:  "You  have  no  direct 
request  addressed  to  you  by  an  officer  of  the  Government."  "The  Attor- 
ney-General, in  construing  the  statute  on  July  1,  1919,  held  that  the 
request  or  demand  must  be  personal."  "All  claims  based  on  such  requests 
or  demands,  as  are  shown  by  the  attached  copies,  have  been  ruled  out." 


84  REPORT  OF  PROCEEDINGS 

Misinterpretation  of  Law 

Thus  three  words  have  been  read  into  the  Act  that  do  not  appear* 
The  word  "specific"  has  been  read  in  by  the  Attorney- General's  decision, 
and  the  words  "direct"  and  "personal"  by  the  Commission's  rendering 
of  the  Attorney- General's  decision.  These  words  "personal"  and  "direct" 
appear  neither  in  the  Attorney-General's  decision  or  in  the  original 
legislation. 

Line  23 :  "Upon  property"  has  been  construed  to  mean  that  no  expendi- 
ture in  the  purchase,  and  no  expenditure  in  connection  with  property 
holdings  of  any  nature,  whether  by  the  recording  of  claims,  legal  expenses, 
State  fees,  or  other  legal  expenditures  are  allowable.  Financing  expenses, 
such  as  commissions  for  the  sale  of  stock,  stock  bonuses  for  the  sale  of 
stock,  etc.,  are  not  allowed. 

Line  36:  The  words  "commercial  importance"  have  been  construed  to 
mean  that  no  property  which  did  not  continue  to  produce  ore  in  com- 
mercial quantities  during  the  period  of  the  war,  can  be  considered.  Any 
property  which  produced  ore  for  a  period  and  was  then  abandoned  prior 
to  the  signing  of  the  armistice,  is  not  considered  basis  for  claim. 

A  great  many  claimants  have  construed  the  words  "commercial  im- 
portance" in  the  manner  usual  in  the  mining  industry,  that  is,  to  signify 
a  property  which  is  or  has  the  potentialities  of  being  a  large  outstanding 
producer  in  the  mining  district.  It  was  obvious,  in  framing  this  bill, 
that  the  words  "commercially  profitable"  could  not  be  used,  because 
where  a  property  commercially  profitable,  there  could  be  no  claim  for 
loss.  So,  in  choosing  a  terminology  which  would  cover  this  situation 
rather  an  unfortunate  choice  is  made  in  the  words  "commercial  impor- 
tance." There  are,  for  example,  in  the  oil  districts  of  Ohio  and  Pennsyl- 
vania thousands  of  small  wells  owned  by  individual  farmers,  which  pro- 
duce five,  ten  or  twenty  barrels  of  oil  per  day.  All  of  these  wells  are 
commercially  profitable,  yet,  no  one  could  say  of  them  that  they  were  of 
commercial  importance.  Many  claimants  have  put  this  same  construc- 
tion of  these  words  in  making  their  claims.  Such  statements  by  the 
claimants  are  being  construed  strictly  against  them  in  the  elimination 
of  such  claims. 

Lines  39  and  40:  "Subsequent  to  April  6  and  prior  to  November  12, 
1918"  has  been  further  construed  to  mean  that  expenditures  falling 
within  that  period  are  further  limited  by  the  date  of  request  or  demand. 
For  example,  if  the  claimant's  expenditures  started  in  July,  1917,  and  his 
request  and  demand  by  some  agent  now  recognized  by  the  Commission 
was  not  made  until  July,  1918,  only  such  losses  as  he  incurred  subsequent 
to  July,  1918,  are  considered.  On  the  other  hand,  if  he  made  profits 
prior  to  July,  1918,  these  profits  must  be  deducted  from  such  losses  that 
he  suffered  subsequent  to  this  date. 

The  last  provision  of  this  Act  that  "nothing  shall  be  construed  to  confer 
jurisdiction  upon  any  court  tp  entertain  a  suit  against  the  United  States" 
holds.  All  procedure  connected  with  these  claims  comes  within  the  De- 
partment of  the  Interior.  The  claimant  has  no  right  to  appeal  to  the 
Court  of  Claims. 


THE  AMERICAN  MINING  CONGRESS  85 

Questionable  Procedure 

There  is  surely  no  justice  in  saying  to  one  claimant  that  because  he  is 
fortunate,  or  hesitant  enough  to  have  written  one  of  the  Government's 
departments  in  response  to  one  of  these  direct  appeals,  asking  for  more 
detailed  information,  and  he  received  from  them  a  letter  personally 
directed,  which  is  simply  a  resume  of  these  bulletins,  he  is  entitled  to 
recovery  for  his  losses,  and  to  say  to  his  neighbor  who  did  not  do  this 
but  began  to  directly  expend  money  for  production  in  response  to  the 
appeals  he  saw  on  every  side,  and  in  response  to  circular  letters  from 
the  departments,  that  because  he  was  not  individually  contemplated  he 
is  not  entitled  to  recovery. 

If  an  advertisement  from  the  Interior  Department,  signed  by  the 
Secretary  of  the  Interior,  which  begins  with  the  words  "wanted  men"  and 
ends  with  the  words  "now  is  the  time  to  get  at  it  in  earnest"  does  not 
constitute  a  request  on  the  part  of  the  Government,  it  is  surely  a  debat- 
able question  whether  or  not  a  man  who  is  under  arrest  charged  with 
violation  of  the  draft  law  has  not  a  valid  defense  in  the  statement  that 
he  was  not  personally,  nor  individually  requested  to  register  for  the 
draft  that  he  simply  heard  of  a  printed  advertisement  signed  by  the 
authority  of  the  Secretary  of  War — yet  this  man  will  go  to  prison  for 
his  failure  to  comply  with  the  request  of  the  Government,  and  the  un- 
fortunate miner  is  going  through  bankruptcy  because  he  did  comply 
with  the  request  of  the  Government. 

Government  Propaganda 

The  assurances  and  encouragement  of  the  Government  must  be  viewed 
in  the  light  of  the  time  at  which  they  were  made.  When  the  Shipping 
Board's  bulletin  was  sent  out,  saying  that  no  time  should  be  lost  in 
production,  and  all  needful  things  for  the  protection  of  the  industry  would 
be  done  in  time,  the  newspaper  headlines  read:  "Germans  hurl  fresh 
divisions  against  the  tired  Allies."  When  Director  Manning's  adver- 
tisement headed:  "An  urgent  message  from  the  Bureau  of  Mines"  ap- 
peared, urging  immediate  production  of  these  War  Minerals  by  all  possi- 
ble avenues,  the  newspaper  headlines  read:  "The  Germans'  75-mile  gun 
again  fires  on  Paris."  When  the  Geological  Survey  letter,  stating  that 
there  would  be  a  shortage  of  580,000  tons  of  high-grade  manganese 
because  of  lack  of  shipping  was  sent  out,  the  newspaper  headlines  read: 
"German  submarines  shelling  and  sinking  American  ships  off  our  own 
coasts."  Surely  it  was  time,  as  Secretary  Lane  stated,  in  the  conclusion 
of  his  next  urgent  advertisement,  to  "get  at  it  in  earnest." 

These  things  should  be  accomplished  by  this  proposed  amended  legis- 
lation. The  request  and  demand  of  the  Government  should  be  considered 
a  general  request  and  demand,  and  each  of  these  bulletins  and  adver- 
timements  should  be  considered  a  part  of  this  request  and  demand. 
Either  the  right  should  be  given  to  claimants  to  have  their  final  awards 
reviewed  in  the  Court  of  Claims  or  the  cases  should  be  so  equitably 
handled  that  such  review  is  not  needed. 


86  REPORT  OF  PROCEEDINGS 

Right  of  Review 

The  question  has  been  raised  as  to  the  right  of  appeal  on  the  part  of 
claimants  from  the  rulings  of  the  Commission  and  from  the  rulings  of 
the  Secretary.  It  is,  of  course,  the  policy  of  the  Interior  Department, 
and  one  which  is  adhered  to  in  all  cases  coming  before  the  Interior 
Department,  that  no  decision  shall  be  appealed  out  of  its  own  Board  of 
Appeals.  The  last  provision  of  this  Act,  stating  that  nothing  shall  be 
construed  to  confer  jurisdiction  upon  any  court  to  entertain  a  suit  against 
the  United  States,  holds  to  this  provision.  All  procedure  upon  these 
claims  comes  within  the  Interior  Department.  The  claimant,  therefore, 
has  no  right  to  appeal  to  the  Court  of  Claims,  so,  while  this  was  passed 
as  a  relief  measure  and  this  provision  shows  it  was  entirely  intended  to 
be  a  relief  measure,  it  is  being  administered  in  the  same  manner  as  a 
claims  board,  in  which  the  questions  of  dispute  between  the  claimant 
and  the  Government  arose,  and  which,  in  case  of  unsatisfactory  settle- 
ment, could  be  appealed  to  the  Court  of  .Claims.  Either  the  right  should 
be  given  to  claimants  to  have  their  final  awards  reviewed  in  the  Court 
of  Claims,  or  the  cases  should  be  handled  so  that  such  review  is  un- 
necessary. 

Most  Claimants  Honest 

Mr.  Moore,  when  we  first  started  our  talk  this  afternoon,  I  regretted 
that  some  of  the  statements  seemed  to  take  the  turn  they  did.  I  am 
sure  that  was  nothing  more  intended  in  criticism  of  the  Commission  or 
its  activities  than  was  intended  by  Mr.  Moore  in  his  reference  to  par- 
ticular claimants.  The  fact  that  we  have  claimants  in  the  group  who 
are  crooks  or  who  are  stupid  or  uneducated  does  not  affect  justice  under 
the  law  and  justice  to  the  people  whom  it  was  intended  to  relieve.  Indi- 
vidual cases  which  are,  as  Mr.  Moore  said,  so  freakish  as  to  make  him 
wish  to  assemble  a  book  of  freaks  when  the  cases  are  all  settled,  should 
not  be  taken  as  a  criterion,  nor  as  a  basis  for  opposing  any  liberal 
interpretation  of  the  law  as  passed  or  a  more  liberal  law  which  should  be 
passed  to  relieve  the  deserving  claimants  who  are  not  now  getting  relief 
under  the  bill. 

We  regret,  of  course,  that  there  are  claimants  whose  claims,  either  in 
whole  or  in  part,  are  unjust.  In  1,206  cases  it  would  be  difficult  to  have 
them  100  per  cent.  pure.  But,  as  Mr.  Moore  has  told  us,  the  Commis- 
sion is  apt  to  be  able  to  tell  whether  or  not  a  man  is  trying  to  put 
anything  over  on  them.  That  is  what  we  want  them  to  do.  In  liberal- 
izing the  present  law,  we  are  not  throwing  down  the  gates  to  dishonest 
procedure,  we  are  not  opening  up  the  Treasury  and  making  the  blue  sky 
the  limit  for  this  reason:  There  has  never,  at  any  time,  been  any  criti- 
cism of  the  functioning  of  the  Commission  in  its  activities  in  and  investi- 
gation of  claims  through  its  interior  machinery.  The  administration  and 
the  manner  in  which  claims  are  investigated,  I  am  sure,  is  absolutely 
satisfactory  to  all  the  claimants,  and  each  claim  should  be  decided  on  its 
individual  merits.  Any  claim  which  is  unjust,  or  unfair,  or  dishonest, 
can  surely  be  checked  up  by  the  engineers  or  the  auditors  through  their 
presenf  Very  adequate  system,  and  an  amendment  which  will  permit  just 


THE  AMERICAN  MINING  CONGRESS  87 

claims  to  be  decided  basically  without  the  request  and  demand  feature 
of  the  law  will  meet  with  the  approval  of  all  of  the  claimants,  and  we 
hope,  will  meet  with  the  approval  of  the  Commission. 

I  should  like  to  open  the  meeting,  with  the  consent  of  the  Chair,  for  a 
general  discussion,  and  should  like  to  hear  from  some  of  the  individual 
claimants  who  are  here. 

CHAIRMAN  VOORHEIS:  Are  there  any  individual  claimants  here 
who  would  like  to  make  any  statements? 

Commissioner  Shafroth  Replies 

SENATOR  SHAFROTH:  Mr.  Chairman,  I  wish  to  reply  to  the  speech, 
of  Mr.  Smith  as  delivered  before  we  discuss  the  matter,  because,  while 
there  are  some  of  the  criticisms  there  that  may  be  considered  as  having 
been  made,  there  are  others  that  are  founded  erroneously  upon  alleged 
rulings,  and  on  that  account  I  would  like  to  have  had  time  to  have 
pointed  out  what  they  are.  Of  course,  a  criticism  in  regard  to  not  giving 
a  right  to  appeal  to  the  Court  of  Claims  is  something  that  Congress 
has  fixed  the  limitation  on.  It  particularly  said  it  shall  not  constitute 
a  claim  against  the  Government,  and  by  reason  of  that  it  is  the  opera- 
tion of  the  law  we  cannot  help;  we  do  not  pass  upon  that;  if  they 
want  new  plans,  they  can  do  it.  If  they  want  to  introduce  a  bill  in  Con- 
gress, they  can  do  it.  Most  of  what  is  said  in  the  article  or  in  the  speech 
that  was  made  by  Mr.  Smith  is  argument  in  favor  of  the  passage  of  a 
more  liberal  bill,  but  we  cannot  determine  what  Congress  shall  do,  nor 
what  provisions  they  shall  make.  They  are  the  law-making  power,  and 
consequently,  they  are  the  ones  to  determine  just  wherein  they  will  pass 
upon  these  matters,  and  the  fact  that  they  have  said  that  there  shall  be 
no  liability  of  the  Government  whatever,  so  that  not  even  a  suit  can  be 
brought  before  the  Government  for  any  losses  that  may  be  sustained, 
that  has  no  connection  with  the  Commission,  but  his  argument  should  be 
directed  to  Congress  itself,  modify  the  law  in  that  respect. 

Congress  to  Blame 

Now,  with  relation  to  what  was  said  as  to  Secretary  Lane's  statement 
in  which  he  asked  the  people  to  produce,  in  publications — now,  that  is 
the  very  thing  that  was  before  Congress  at  that  time.  That  declaration 
which  was  made  by  Secretary  Lane  was  taken  into  consideration  by 
Congress.  He  was  in  favor  of  allowing  this  published  request,  he 
approved  the  Henderson  amendment  as  it  passed  the  Senate,  but  when 
it  came  to  the  House  they  said,  no,  they  would  not  do  it — "We  will  not 
hold  that  the  Government  can  be  liable  in  a  case  of  that  kind."  I  care 
not  what  attitude  parties  may  take,  but  if  they  blame  Secretary  Lane 
for  this  matter  it  is  all  predicated  upon  a  wrong  theory,  because  Secre- 
tary Lane  had  nothing  to  do  with  the  Congressional  Act,  and  was 
trying  to  get  some  relief  for  persons  who  had  expended  money  under 
these  circumstances. 

The  same  with  Director  Manning.  Director  Manning  was  anxious 
that  ore  should  be  produced,  but  they  had  no  power  to  ask  a  man,  the 


88  REPORT  OF  PROCEEDINGS 

"*  *•"* -^»«»-.      -  -.-•-?. -p-^.     . 

liability  against  the  Government,  to  go  out  and  produce,  and  the  Con- 
stitution of  the  United  States  and  the  laws  of  the  United  States  prohibit 
any  such  thing,  and  yet  he  was  in  favor  of  the  very  legislation  that 
passed  the  Senate  of  the  United  States,  saying  that  published  reports 
were  proper  and  that  they  were,  as  a  matter  of  fact,  sufficient  upon 
which  to  impose  not  a  liability,  but  to  get  Congress  to  recognize  the 
moral  obligation  of  the  Government  to  pay.  Granting  that  may  be 
a  strong  argument  as  to  the  Commission,  here  are  the  limitations  that 
are  imposed,  and  consequently  we  have  to  observe  those  limitations. 

Now,  I  ask  you,  what  will  you  appeal  to  Congress  on?  Why,  of 
course,  the  equity  of  your  cases,  the  thing  by  which  to  go  to  them,  but 
so  far  as  Secretary  Lane  is  concerned,  so  far  as  Mr.  Manning  is  concerned, 
so  far  as  the  Director  of  Geological  Survey  is  concerned,  they  have 
shown  nothing  but  a  level  spirit  to  give  every  man  that  comes  within  the 
statute  even  a  liberal  construction  from  the  standpoint  of  what  is  within 
the  statute. 

t 
Not  Opposing  Legislation 

Now,  that  is  the  situation  as  it  is,  and  there  are  some  rulings  there 
with  relation  to  matters  that  we  have  not  ruled  upon  at  all.  I  cannot 
go  into  detail,  I  have  consumed  too  much  time  now,  but,  of  course,  if 
you  are  going  to  have  Congress  amend  the  Act,  it  is  a  matter  that  the 
Commission  can  adapt  itself  to  very  easily  if  Congress  passes  the  Act. 

We  are  not  in  the  attitude  of  opposing  anybody,  we  are  in  the  attitude 
of  simply  administering  the  law  as  we  find  it,  and  we  have  to  do  that 
if  we  are  going  to  recognize  that  men  must  obey  the  proper  legal 
authorities  when  they  say  that  certain  things  shall  exist,  a  certain  thing 
shall  be  allowed,  certain  limitations  of  commercial  importance,  certain 
limitations  as  to  requests  exist,  we  would  be  violating  our  oath  of  office 
if  we  did  not  interpret  that  just  as  the  law  plainly  recognizes  to  be  the 
interpretation  intended  by  Congress. 

Now,  I  cannot  go  into  details  on  this,  but  I  want  to  say  that  almost 
all  of  the  provisions  that  are  there  are  things  that  you  should  direct  to 
Congress  and  not  to  the  Commission. 

Mr.  SMITH:  If  the  distinguished  Senator  has  felt  that  my  state- 
ment was  intended  as  a  criticism  of  the  Commission,  it  is  a  very  great 
injustice  both  to  me  and  to  the  Commission.  This  is  an  excerpt  from 
a  statement  that  I  made  before  the  House  Committee  on  Mines  and 
Mining,  in  support  of  the  joint  resolution  to  amend  the  War  Minerals 
Relief  Act.  It  was  made  in  the  most  direct  manner  to  Congress,  in  which 
a  person  who  is  not  a  member  of  Congress  can  make  a  statement  before 
that  body.  It  was  requested  of  me  this  afternoon  by  some  of  the  War 
Minerals  claimants  who  are  here  that  these  excerpts  be  given  as  a  basis 
for  opening  the  general  discussion. 

The  rulings,  or  decisions,  or  procedure  as  quoted,  were  not  quoted  to 
criticise  the  Commission,  but  to  show  how  the  Commission  was  com- 
pelled to  function  under  the  present  law,  and  they  were  made  originally 
before  the  Committee  on  Mines  and  Mining  with  an  effort  of  amending 


THE  AMERICAN  MINING  CONGRESS  89 

the  present  law.  When  that  law  comes  before  Congress  it  is  not  going 
to  be  referred  to  the  American  Mining  Congress  for  its  approval,  it  is 
not  going  to  be  referred  to  the  War  Minerals  claimants,  it  is  going  to 
be  referred  to  the  Department  of  the  Interior,  and  if  the  Department 
of  the  Interior  will  show  its  liberality  and  its  interest  in  War  Mineral 
claimants  by  getting  back  of  us,  this  meeting  is  over  right  now.  That  is 
what  we  want. 

SENATOR  SHAFROTH:  I  will  state  to  the  gentleman  that  the 
Congress  did  overrule  the  recommendations  of  the  Secretary  of  the 
Interior  and  of  the  Director  of  the  Bureau  of  Mines  in  the  very  passage 
of  this  Act,  because  they  approved  the  Henderson  amendment,  and  that 
amendment  was  passed  by  the  Mines  and  Mining  Committee  and  sent 
up  with  the  understanding  that  that  was  approved  by  the  Secretary  of 
the  Interior,  and  yet  the  House  said  "No,  we  will  not  do  it,"  and  the 
Senate,  of  course,  could  get  no  law  unless  it  approved  the  law  which  the 
House  passed. 

CHAIRMAN  VOORHEIS:  Are  there  any  claimants  here  who  would 
like  to  question  the  Commission  or  make  any  statement  of  their  own? 
If  so,  we  would  be  glad  to  hear  from  them. 

MR.  RAKOWSKY:  I  do  not  see  how  either  one  of  the  Commissioners 
could  object  to  an  amendment  to  the  law  which  would  place  them  in 
a  much  better  position,  as  Mr.  Moore  stated.  Some  of  the  men,  he 
feels,  should  have  received  an  award  in  these  cases.  Those  men  should 
be  protected,  if  we  only  protect  10  or  100  that  have  sustained  these 
losses.  I  think  Senator  Shafroth  or  Mr.  Moore  should  get  behind  a  con- 
structive move  of  the  Mining  Congress  and  should  advise  with  this  Board 
selected  by  the  mineral  producers  to  bring  about  the  framing  of  an 
amendment  that  will  cure  this  entire  situation. 

Asks  Commissioners  to  Back  Amendment 

I  would  like  to  ask  Senator  Shafroth  and  Mr.  Moore  if  they  would 
not  be  willing  at  this  time  to  recommend  to  Secretary  Lane  an  imme- 
diate cure  of  the  situation  through  amendment  of  the  Act? 

SENATOR  SHAFROTH:  Mr.  Chairman,  I  will  state  to  the  gentleman 
that  the  Secretary  of  the  Interior  has  written  a  letter  to  the  Committee 
on  Mines  and  Mining  of  the  House  of  Representatives,  and  to  the  Com- 
mittee on  Mines  and  Mining  of  the  Senate,  in  which  he  suggested  that 
this  Commission  is  proceeding  at  a  very  rapid  rate,  four  hundred  and 
some  odd  decisions  having  been  rendered,  and  that,  after  the  elimination 
of  the  claims  which  have  not  had  such  a  request  as  interpreted  by  the 
Attorney-General,  that  then  he  would  be  prepared  to  recommend  a  meas- 
ure to  Congress.  Now,  the  object  of  that  is  this:  If  the  claims  that  are 
now  before  the  Commission  leave  a  surplus  in  the  hands  of  the  Govern- 
ment of  a  substantial  nature,  unquestionably  Congress  will  pass  some 
law  in  some  way  disposing  of  that  surplus,  and  the  difficulty  about  the 
matter  of  attempting  that  legislation  now  is  the  fact  that  we  have  paid 
awards  in  full.  There  was  a  great  cry  made  that  bankruptcy  would 
stare  people  in  the  face  if  we  paid  only  50  per  cent.,  although  the  total 


90  REPORT  OF  PROCEEDINGS 

sum  of  claims  is  $18,000,000,  and  the  appropriation  was  $8,500,000,  and  in 
view  of  that  stress,  Secretary  Lane  concluded  that  he  would  make  pay- 
ment of  awards  in  full  so  as  to  relieve  the  parties  in  distress.  If  remedial 
legislation  validates  all  claims  the  result  might  be  that  claimants  having 
received  awards  would  have  to  turn  back  to  the  Government  some  of 
their  award. 

If,  however,  there  is  a  surplus,  or  a  clear  indication  of  a  surplus  after 
the  Commission  has  proceeded,  you  can  readily  see  that  then  would  be 
a  proper  time  for  Congress  to  size  up  the  matter  as  to  allowing,  either 
by  a  general  appropriation  which  would  be  unlimited  as  to  the  amount, 
or  by  dividing  the  surplus  among  those  who  can  prove  just  claims  in 
other  respects  than  in  making  requests. 

Secretary  Lane  has  this  matter  in  mind.  He  has  written  these  com- 
mittees and  I  think  the  committees  have  thought  that  that  is  a  very 
sensible  thing  to  do.  It  may  be  that  the  persons  who  got  no  request 
may  not  get  quite  as  much  as  those  that  did  get  requests,  but,  never- 
theless, you  can  see  that  if  a  claimant  has  received  his  award  and  gotten 
his  money,  put  it  in  his  pocket  and  spent  it,  probably  he  would  feel  like 
having  a  very  just  ground  of  complaint  against  the  Government  if  he 
had  to  yield  back  a  portion  because  of  somebody  else,  as  the  law  then 
stood,  not  getting  the  amount  that  he  claimed  he  was  entitled  to. 

Secretary  Lane  has  been  in  sympathy  with  this  Act.  He  was  in  favor 
of  the  measure  as  it  passed  the  Senate,  and  he  is  the  man  with  Congress 
to  determine  this  policy  of  the  Government,  and  I  have  no  doubt  but 
that  he  wants  to  do  what  is  fair,  what  is  right,  in  view  of  the  circum- 
stances and  in  view  of  the  amount  of  money  that  will  be  left  in  this  fund 
after  the  payment  of  the  claims  that  did  have  a  request. 

CHAIRMAN  VOORHEIS:  Is  there  any  other  gentleman  here  who  is 
a  claimant  and  who  would  like  to  speak?  I  think  we  might  as  well 
adjourn.  If  there  is  no  objection  the  meeting  will  now  be  adjourned 
subject  to  call  when  requested. 

ADJOURNMENT. 


THE  AMERICAN  MINING  CONGRESS  91 


NATIONAL  CONFERENCE  OF  SCHOOLS  OF 

MINES 

American  Mining  Congress 

TUESDAY  AFTERNOON,  NOVEMBER  18,  1919 
COMMITTEE  IN  CHARGE 

A.  L.  McRAE,  Director,  Missouri  School  of  Mines. 

VICTOR  C.  ALDERSON,  President,  Colorado  School  of  Mines. 

H.  H.  STOEK,  Professor  of  Mining  Engineering,  University  of  Illinois. 

Conference  called  to  order  at  2.30  P.  M.,  Tuesday,  November  18,  A.  L. 
McRae  presiding. 

The  following  papers  were  read: 

"Business  Training  in  Mining  and  Metallurgical  Curricula,"  by  Dr. 
Lewis  E.  Young,  heat  engineer,  Union  Electric  Company,  St.  Louis,  Mo. 

"Closer  Co-operation  of  the  Colleges,  United  States  Bureau  of  Mines 
and  Industrial  Corporations  in  Research  Investigations,"  by  E.  A.  Hoi- 
brook,  superintendent  Pittsburgh  Station,  Bureau  of  Mines;  paper  read 
by  Dorsey  A.  Lyon. 

"Racial  Characteristics  and  Their  Effect  in  Industry,"  by  Thomas  T. 
Read,  engineer  in  charge,  Division  of  Education  and  Information,  Bureau 
of  Mines. 

These  papers  were  discussed  by  Carroll  R.  Forbes,  professor  of  min- 
ing, Missouri  School  of  Mines;  Francis  A.  Thomson,  dean,  School  of 
Mines,  University  of  Idaho;  Victor  C.  Alderson,  president,  Colorado 
School  of  Mines;  H.  H.  Stock,  professor  of  mining  engineering,  Uni- 
versity of  Illinois;  Edwin  Ludlow,  president  Alumni  Association,  Colum- 
bia School  of  Mines;  G.  H.  Cox,  professor  of  geology  and  mineralogy, 
Missouri  School  of  Mines;  G.  M.  Butler,  dean,  School  of  Mines  and  En- 
gineering, University  of  Arizona;  F.  C.  Lincoln,  director,  Mackay  School 
of  Mines,  Reno,  Nevada,  and  others. 

On  Permanent  Organization 

The  chairman  appointed  F.  C.  Lincoln,  director,  Mackay  School  of 
Mines,  Reno,  Nevada;  Francis  A.  Thomson,  dean,  School  of  Mines,  Uni- 
versity of  Idaho,  and  G.  M.  Butler,  dean,  College  of  Mines  and  Engineer- 
ing, University  of  Arizona,  as  a  committee  to  take  the  necessary  steps 
for  forming  a  permanent  School  of  Mines  Section  of  The  American 
Mining  Congress. 

(The  addresses  and  papers  appear  on  pages  560,  576  and  583  of  this 
report.) 

[EDITOR'S  NOTE. — The  Committee  on  Organization,  after  careful  con- 
sideration of  the  problem,  has  announced  its  decision  to  report  favorably 
and  to  include  in  membership  not  only  presidents  and  directors  of  min- 
ing schools  but  faculties  of  the  same.  State  mining  officials  may  be 
enrolled  in  this  Section.] 


92  REPORT  OF  PROCEEDINGS 


SAFETY  AND  WELFARE  SECTION 

American  Mining  Congress 
Under  Direction  of  U.  S.  Bureau  of  Mines 

WEDNESDAY  MORNING,  NOVEMBER  19,  1919 

The  meeting  convened  in  Exposition  Hall  at  10  A.  M.,  Mr.  Morton  F. 
Leopold,  safety  engineer  of  the  United  States  Bureau  of  Mines,  presiding. 

CHAIRMAN  LEOPOLD:  The  meeting  will  come  to  order.  In  con- 
nection with  the  meeting  of  The  American  Mining  Congress  this  year, 
it  was  thought  advisable  to  devote  one  section  to  the  discussion  of  safety, 
welfare  and  the  industrial  work  now  being  carried  on,  not  only  by  the 
mining  industry  itself,  but  by  some  of  the  largest  industrial  corporations 
that  we  have  in  the  country. 

At  previous  meetings  of  the  mining  fraternities,  such  as  the  American 
Institute  of  Mining  Engineers,  and  The  American  Mining  Congress,  we 
have  held  these  safety  meetings  and  there  have  been  no  speakers  present 
at  these  meetings  other  than  the  members  of  the  mining  profession. 
But  we  have  adopted  a  new  plan  this  time  and  will  hear  the  other 
fellow's  side  of  the  story.  We  will  find  out  what  is  being  done  in  some 
of  our  largest  industrial  plants  in  America  to  take  care  of  the  labor 
situation  through  safety  and  welfare  work. 

One  Million  Miners  Need  Safety  Work 

When  we  take  into  consideration  that  there  are  approximately  one 
million  men  engaged  in  the  mining  industry,  and  that  industry  claims 
about — in  round  figures — 2,000  deaths  per  year,  we  can  see  what  great 
need  there  is  for  co-operation.  Up  to  the  present  we  have  been  able  to 
reduce  the  death  rate  greatly  within  the  past  eight  or  ten  years,  espe- 
cially since  the  creation  of  the  United  States  Bureau  of  Mines  in  1910. 

Now,  we  want  to  hear,  as  I  stated  before,  from  the  other  fellow; 
what  he  is  doing  to  bring  about  the  contented  labor  situation  which 
exists  in  many  of  the  large  industries  in  this  country. 

Industrial  Losses  Worse  Than  War 

When  we  take  into  consideration  that  in  the  19  months  of  the  war 
there  were  50,152  men  who  lost  their  lives,  and  in  the  same  period  of  19 
months  there  were  126,654  men,  women  and  children  killed  in  the 
industries  and  on  the  streets  in  the  United  States,  we  can  see  the  need 
of  co-operation  between  all  industries  with  the  mining  industry,  and  the 
mining  industry  with  all  other  industries. 

As  the  representative  of  the  Bureau  of  Mines  at  this  meeting,  and 
selected  as  chairman  of  it,  I  sincerely  hope  that  we  can  find  some  way 
by  which  we  can  form  a  Safety  Committee — a  National  Safety  and 


THE  AMERICAN  MINING  CONGRESS  93 

Welfare  Committee — that  will  be  able  to  meet  once  a  month  or  once  in 
every  two  months  in  various  parts  of  the  country  and  have  the  good 
counsel  and  advice  of  such  men  as  we  have  here  today.  We  need  to  go 
a  little  outside  of  the  mining  industry  to  get  good  points.  We  will 
probably  be  able  to  incorporate  these  good  points  in  our  own  safety  work 
that  is  being  carried  out  throughout  the  United  States. 

The  first  speaker  this  morning  will  be  Mr.  C.  W.  Seiberling,  vice-presi- 
dent of  the  Goodyear  Tire  &  Rubber  Company. 

(Mr.  Sieberling's  address  will  appear  on  page  588.) 

CHAIRMAN  LEOPOLD:  Before  the  meeting  there  were  remarks 
from  the  men  who  were  waiting  to  hear  the  addresses  that  they  were 
quite  impatient  on  account  of  the  half  hour  or  three-quarters  delay,  but 
I  think  we  have  been  well  repaid  so  far  by  Mr.  Seiberling.  We  have 
heard  his  story  in  regard  to  the  great  work  they  are  doing,  and  we  will 
now  hear  from  the  mining  industry. 

Dr.  J.  J.  Rutledge,  mining  engineer  of  the  United  States  Bureau  of 
Mines,  of  McAlester,  Oklahoma,  who  is  in  charge  of  the  activities  of  that 
Bureau  in  the  State  of  Oklahoma  and  vicinity,  will  now  address  us.  His 
subject  will  be  "A  Proposed  First-Aid  and  Mine-Safety  Organization." 
It  gives  me  pleasure  to  introduce  Dr.  J.  J.  Rutledge.  [Applause.] 

The  Gospel  of  Safety  First 

DR.  RUTLEDGE:  Mr.  Chairman  and  Members  of  The  American 
Mining  Congress:  It  is  rather  remarkable  how  well  these  subjects — 
chosen  by  men  from  different  parts  of  the  country — are  going  to  "dove- 
tail" together.  I  have  not  talked  to  Mr.  Ryan,  only  in  a  general  way; 
I  never  saw  Mr.  Seiberling  before,  and  certainly  did  not  know  what  he 
was  going  to  speak  about,  but  before  Mr.  Ryan  and  I  conclude  you  will 
see  how  well  these  subjects  "dove-tail"  together.  It  is  probably  a 
happy  Providence  that  brings  it  so. 

As  the  chairman  told  you,  I  have  charge  of  one  of  the  districts,  the 
Southwestern  district,  for  the  United  States  Bureau  of  Mines.  As 
district  engineer  a  part  of  my  duty  is  to  spread  the  gospel  of  first  aid 
and  mine  rescue.  Almost  11  years,  the  best  years  of  my  life,  have  been 
devoted  largely  to  that. 

We  have  had  certain  problems  in  this  work,  we  have  tried  to  solve  those 
problems,  and  one  of  the  solutions  I  hope  I  am  going  to  present  here 
today — the  problem  of  interesting  miners  in  mine-safety  and  first-aid 
work — because  if  we  do  that,  if  we  secure  their  interest  and  co-operation, 
there  will  be  very  few  mine  accidents. 

The  details  of  this  plan,  as  presented  here,  were  worked  out  by  myself 
in  connection  with  Mr.  Noel  Hubbard,  who  was  until  recently  chief  clerk 
at  the  mine  mills  at  Bartlettsville,  Oklahoma,  but  now  is  chief  clerk  at 
Golden.  We  co-operate  in  this  plan,  but  at  the  time  the  plan  was  worked 
out  I  had  Mr.  Hubbard  as  my  stenographer  in  a  safety  station  at 
McAlester,  Oklahoma. 

(Dr.  Rutledge's  address  will  appear  on  page  597.) 


94  REPORT  OF  PROCEEDINGS 

CHAIRMAN  LEOPOLD :  We  have  heard  from  Dr.  Rutledge  in  regard 
to  safety  methods  in  bituminous  coal  mining,  and  we  are  going  to  hear 
from  Mr.  W.  D.  Ryan,  manager  of  the  Safety  Section  of  the  United 
States  Railroad  Administration. 

(Mr.  Ryan's  address  will  appear  on  page  612.) 

CHAIRMAN  LEOPOLD :  I  think  we  have  all  been  well  repaid  by  spend- 
ing the  amount  of  time  here  that  we  have,  and  I  want  to  thank  those 
present  for  coming. 

I  also  want  to  pay  special  thanks  and  express  my  appreciation  to  the 
gentlemen  who  have  taken  part  in  this  Conference  and  assisted  in  making 
it  successful. 

I  think  probably  the  good  work  that  the  Goodyear  Tire  &  Rubber 
Company  is  doing  in  Government  work  and  "Safety  First"  work  will  be 
spread  by  the  action  of  the  President.  I  regret  very  much,  as  I  stated,, 
that  we  have  not  been  able  to  spread  this  propaganda  by  word  of  mouth 
to  a  greater  gathering  here  this  morning. 

The  Conference  will  now  stand  adjourned.    I  thank  you  all. 


THE  AMERICAN  MINING  CONGRESS  95 


NATIONAL  OIL  SHALE  CONFERENCE 

American  Mining  Congress 

WEDNESDAY  AFTERNOON,  NOVEMBER  19,  1919 
PLANTERS'  HOTEL,  ST.  LOUIS,  MO. 

The  meeting  convened  at  3.15  P.  M.,  Dr.  Victor  C.  Alderson,  president, 
Colorado  School  of  Mines,  Golden,  Colo.,  presiding. 

CHAIRMAN  ALDERSON:  I  cannot  help  feeling,  gentlemen,  as  I 
have  thought  this  day,  that  this  meeting  of  November  19,  1919,  marks 
.a  distinct  epoch-making  event.  Our  ordinary  work,  and  the  work  of 
such  a  Congress  as  this,  deals  with  present-day  troubles,  present-day 
problems,  as  a  result  of  past  epochs.  Our  work  today  is  epoch-making 
in  that  this  audience,  this  section,  will  be  a  group  of  men  who  are  the 
first  ones  to  give  national  recognition  to  a  new  and  great  industry.  I 
feel,  in  approaching  this  subject,  we  should  look  upon  it  with  an  open 
mind,  more  as  optimists  than  as  pessimists. 

I  recall  some  years  ago  in  my  experience,  when  I  was  dean  of  an 
engineering  school,  my  professor  of  electricity  came  in,  sat  down,  and 
said:  "Are  you  busy?"  and  I  said:  "What  a  foolish  question!"  He  said: 
"I  want  your  undivided  attention  and  the  best  mental  thought  you  have. 
Brace  yourself."  "Well,"  I  said,  "what  is  it?  Let's  have  it  out."  Then 
he  said:  "There  is  a  young  man  here  from  the  East  who  has  an  idea. 
He  has  no  money,  but  he  wants  to  work  in  our  electrical  laboratories." 
I  said:  "What  is  his  idea?"  "Why,"  he  said,  "he  says  he  can  telegraph 
without  wires." 

Wireless  telegraphy  had  not  then  come  into  the  language.  I  said: 
"Telegraph  without  wires!  Freeman,  what  are  you  thinking  of,  or  have 
you  filled  the  inside  of  your  head  with  glue?"  He  said:  "No,  but  here 
is  a  new  idea."  So  we  talked  it  over  in  a  scientific  way,  based  upon 
the  wave  theory  of  light,  heat  and  sound,  and  I  saw  at  once  the  idea 
was  that,  if  there  were  certain  peculiar  waves  that  one  instrument  here 
could  start  and  you  could  get  a  machine  miles  away  just  so  tuned  to 
catch  those  waves,  you  could  telegraph  without  wires. 

At  that  day  and  that  hour,  it  seems  to  me,  wireless  telegraphy  was 
born,  because  I  found  a  way  to  give  the  young  man  a  chance  to  work, 
and  wireless  telegraphy  on  that  basis  was  perfected  in  this  country 
before  Marconi  perfected  it. 

Birth  of  New  Industry 

We  should  be  in  that  same  frame  of  mind  with  regard  to  the  oil  shale 
industry.  It  is  a  new  one  and  many  will  not  believe  what  we  tell  them 
.about  it;  they  are  still  skeptical,  but  if  the  world  depended  upon  them 
alone  we  never  would  advance.  In  this  we  are  pioneers,  because  this 


96  REPORT  OF  PROCEEDINGS 

is  the  dawn  of  a  new  industry,  and  this  is  its  birthday.  To  see  that 
properly,  we  should  consider  that  oil  shale  has,  as  a  background,  the 
petroleum  industry. 

Looking  the  facts  squarely  in  the  face,  it  must  be  recognized  that,, 
with  all  due  regard  to  the  tremendous  wells,  great  gushers  that  have 
been  discovered — the  great  Burke-Burnett  fields  with  the  seven  million 
barrels  production  and  the  Ranger  with  twelve  million  barrels  at  the 
one  end — at  the  other  end  it  must  be  recognized  that  even  though  there 
are  a  quarter  of  a  million  oil  wells  in  the  country,  yet  the  average 
daily  production  is  only  four  and  one-half  barrels,  and  that  the  demand 
for  petroleum  is  exceeding  the  supply. 

Oil  Production  Past  Peak 

In  the  three  years  preceding  1918,  twenty-six  million  barrels  of  petro- 
leum were  drawn  from  supplies  to  meet  the  demand;  in  the  years  1917 
and  1918,  twenty-five  million  barrels  were  taken  out.  That  simply  means, 
if  we  look  the  matter  squarely  in  the  face,  that  the  apex  has  been  reached, 
and  we  are  on  the  down  grade  with  regard  to  the  supply  of  our  needs 
of  petroleum  from  wells.  Accompanying  that  is  a  gradual  increase  in 
the  price  of  crude  oils,  and,  naturally,  the  man  of  vision  is  looking  to 
see  what  is  going  to  happen  in  the  near  future. 

The  answer  to  that  is  that  we  have  recently  found  there  is  stored 
up  in  a  place  we  never  suspected  before  an  amount  of  oil  that  we  can 
manufacture,  if  you  please,  sufficient  for  all  our  needs  for  virtually  an 
indefinite  length  of  time.  I  refer,  of  course,  to  our  deposits  of  oil  shale. 
Those  are  found  in  Colorado,  Wyoming,  Nevada,  Utah  and  California 
in  this  country;  in  Canada,  New  Brunswick,  Scotland,  France,  Germany, 
New  Zealand  and  South  Wales,  South  Africa,  Australia,  Brazil,  and  vir- 
tually all  over  the  world,  are  these  deposits  of  shale  which  are  peculiar 
in  that  they  do  not  contain  any  oil  as  such. 

Now,  I  am  prepared  to  make  some  startling  statements;  I  am  pre- 
pared to  have  you  question  and  criticize  a  number  of  them,  but  I  will 
stand  by  them  just  exactly  the  same,  regardless  of  whether  you  think 
I  am  telling  you  the  truth  or  whether  I  am  stretching  it  largely.  But 
the  bare  facts  in  regard  to  the  oil  shale  are  almost  unbelievable.  This 
is  oil  shale  (exhibited  specimen),  but  there  is  no  oil  in  it  as  such;  it  is 
not  greasy. 

Peculiar  Facts  About  Shale 

The  peculiar  fact  is  that  when  this  shale,  or  clay,  or  mud,  was  laid 
down  in  geologic  times,  nature  was  kind  enough  to  bring  in  from  the 
surrounding  hills  and  mountains  and  deposit  with  this  shale  the  remains 
of  plant  and  animal  life  in  such  a  proportion  that  if  you  treat  this  shale 
properly  you  will  manufacture  oil.  Now,  a  homely  illustration  is  that 
if  you  see  some  flour  and  water  and  salt  and  baking  powder  and  what 
not,  put  together  and  some  dough  made,  you  would  have  dough  but  no 
bread;  if  you  bake  the  dough,  you  do  get  bread.  You  have  no  oil  here 


THE  AMERICAN  MINING  CONGRESS  97 

as  such,  but  if  you  cook  the  shale  you  do  get  oil.  That  is  the  distinction 
that  should  be  made. 

Our  oil  from  the  shale  is  a  manufactured  product,  and  as  such,  the 
resulting  product  can  be  controlled,  as  the  petroleum  from  wells  cannot 
be  controlled. 

My  duty,  of  course,  is  simply  to  touch  upon  the  high  spots  in  the 
beginning  of  this  meeting,  so  I  cannot  go  into  great  detail;  but  I  merely 
want,  to  call  your  attention  to  some  of  the  main  facts,  because  while  I 
recognize  some  who  know  a  great  deal  more  about  this  subject  than  I 
do,  yet  I  can  see  some  others  who,  perhaps,  know  less,  and  so  it  is  well 
to  have  some  of  these  simple  things  pointed  out  to  them. 

Shale  Deposits  Unlimited 

I  have  said  that  there  is  virtually  an  unlimited  amount  of  oil  shale. 
I  mean  that  as  literally  true.  I  made  a  compilation  once  (you  may  check 
it  over  after  me),  to  figure  out  how  much  of  a  supply  we  had  in  Colo- 
rado. In  one  of  our  valleys  we  have  three  10-foot  strata  right  before  our 
eyes,  as  clearly  marked  as  the  lines  around  this  room.  I  will  figure  out 
one  10-foot  strata,  assuming  that  to  cover  our  known  area  in  Colorado 
of  2,500  miles.  I  will  leave  one-half  in  the  ground  for  pillars  and  waste; 
simply  take  one-half  of  that,  and  assuming  (which  we  all  know  to  be  a 
well-established  fact)  that  that  shale  will  produce  approximately  a 
barrel  of  oil  to  the  ton,  I  will  figure  out  how  much  oil  we  can  get  out 
of  these  rocks  and  how  long  it  will  take  to  exhaust  the  amount  of  shale 
that  we  know  is  easily  accessible  in  the  State  of  Colorado. 

If  we  had  100  plants  treating  2,000  tons  of  this  shale  a  day,  we  would 
have  a  sufficient  supply  for  800  years.  Then  I  had  it  checked  over  by 
a  certified  public  accountant  to  make  sure  that  my  figures  were  correct, 
they  were  so  astounding.  All  this  is  without  counting  Utah,  Nevada, 
California  and  all  the  rest  of  the  world.  In  other  words,  the  quantity 
of  oil  shale  that  is  available  is  almost  beyond  conception,  and  that  is 
the  source  of  our  oil  for  the  future. 

Shale  Industry  to  Lead 

It  is  my  firm  conviction— and  I  am  perfectly  willing  to  state  it  as  a 
prophecy — that  the  oil  shale  industry  and  the  production  of  oil  will, 
within  your  lifetime  and  mine,  meet  such  proportions  that  it  will  over- 
shadow both  the  oil  from  wells  and  coal  as  well. 

Please  remember  that  I  said  I  was  going  to  make  a  statement  of  star- 
tling remarks;  that  is  one.  If  I  recall,  there  was  one  before  that,  and 
here  is  another  one:  I  have  done  some  figuring  on  the  amount  of  gas 
that  can  be  extracted  from  the  shale.  You  heat  the  shale  by  destructive 
distillation,  as  it  is  called — that  is,  heat  it  in  a  closed  retort,  and  in  the 
process  you  will  get  gas. 

Now,  singularly  enough,  from  that  shale  you  will  get  enough  gas  to  be 
equivalent  in  heat  power  to  30  tons  of  coal,  which  will  run  your  plant.  In 
other  words,  if  you  once  get  started,  you  can  produce  your  oil  and  enough 
gas  at  the  same  time  to  keep  your  plant  going. 


98  REPORT  OF  PROCEEDINGS 

Some  of  my  friends  will  want  to  come  a  little  closer  into  the  discussion 
of  that,  because  they  want  to  be  a  little  more  technical,  but  to  the  average 
person  that  is  quite  enough.  This  whole  industry  may  be  divided  into 
several  large  groups:  the  first  one  is  the  mining  of  our  shale,  which  I 
think  can  be  passed  over  easily,  because  most  of  our  shale  lies  in  hori- 
zontal beds  and  there  is  nothing  new  in  the  mining  of  shale  that  has 
not  already  been  thoroughly  worked  out  and  well  known  in  the  mining 
of  coal. 

Retorting  the  Problem 

The  real  serious  question — the  troublesome  problem — in  the  oil  shale 
industry  is  in  the  retorting  of  the  shale  and  the  making  of  the  crude 
oil.  Many  processes  have  been  worked  upon — some  very  close  indeed  to 
a  commercial  basis ;  some  are  far  from  a  commercial  basis ;  some  are  based 
on  a  correct,  scientific  basis ;  some  have  been  advanced  by  men  who  know 
little  or  nothing,  some  by  men  who  know  a  great  deal. 

I  believe  we  are  just  on  the  threshold  of  commercial  plants  for  retorting 
oil  shale,  just  on  the  threshold  this  minute.  Those  who  have  an  idea 
that  the  oil  shale  industry  may  amount  to  something  in  25  years  are 
going  to  have  a  very  sudden  and  startling  awakening,  because  the 
industry  has  arrived.  It  is  here  now. 

The  critical  point,  the  real  problem,  has  been  in  the  retorting  of  the 
shale — that  is,  the  handling  of  the  heat  especially,  because  there  are 
technical  difficulties  in  connection  with  that  which  had  to  be  overcome. 
I  believe  they  are  virtually  overcome  now. 

It  is  a  question  of  putting  money  behind  these  men  who  have  the 
ideas  to  enable  them  to  erect  plants.  The  next  is  the  refining,  and  the 
refining  of  the  shale  oil  is  a  well-established  industry.  A  good  deal  of 
work  has  been  done  by  one  of  the  refining  companies,  which  has  found, 
by  experimental  work,  that  the  products  from  shale  oil  are  better  than 
that  submitted  by  the  Standard  Oil  Company.  The  final  stage,  of  course, 
the  marketing  of  the  product,  is  a  business  by  itself. 

Shale  Industry  Seventy  Years  Old 

Historically,  the  oil  shale  industry  is  not  far  from  70  years  old,  be- 
cause it  was  started  in  Scotland  as  early  as  1851.  There  the  conditions 
for  making  shale  oil  were  very  serious;  the  shale  beds  were  inclined 
steeply,  faulted,  and  twisted.  But  the  Scotch  shale,  fortunately,  con- 
tained a  good  deal  of  nitrogen  as  a  basis  for  the  production  of  ammonium 
sulphate. 

In  this  country  a  great  many  experiments  have  been  made.  We 
know,  and  St.  Louis  can  be  proud  of  the  fact,  that  some  of  the  best 
work  has  been  done  in  your  midst,  both  in  refining  and  retorting.  I 
think  it  is  quite  important  that  this  natal  day  should  be  celebrated  in 
St.  Louis,  because  of  the  work  that  has  already  been  done  here. 


THE  AMERICAN  MINING  CONGRESS  99 

Experimental  Plants 

In  Colorado  very  important  work  has  been  done  at  Grand  Valley  and 
De  Beque,  and  it  is  going  on  faster  than  ever.  At  Elko,  Nevada,  the 
process  is  just  on  the  point  of  coming  into  its  own  in  a  commercial-sized 
plant.  I  was  there  three  or  four  weeks  ago,  and  Mr.  Sheeler  said  every- 
thing had  been  made  ready  to  produce  100  tons  a  day,  except  fixing  up 
his  gas  producer. 

The  great  question  that  is  involved  which  is  in  the  mind  of  almost 
everybody  is  this:  When  can  you  make  a  shale  oil  at  such  a  figure  that 
you  can  compete  in  the  markets  of  the  world  with  the  petroleum  from 
wells?  When  you  can  do  that,  the  shale  oil  industry  is  on  its  feet.  I 
am  inclined  to  think — and  I  will  put  it  to  you  as  a  fair  and  square  propo- 
sition— that  time  is  right  before  us  now. 

I  have  taken  the  trade  papers,  and  I  find  that  on  the  average  the 
Mexican  petroleum  brings — purchased  by  the  pipe  line  companies — from 
99  cents  to  $1.10  per  barrel.  At  Gulf  Coast  points  the  petroleum  brings 
96  cents  per  barrel,  but  that  is  low  grade.  The  Wyoming  oil,  on  the 
average,  brings  to  the  producers,  i.  e.,  the  price  paid  by  the  pipe  line  at 
the  well,  $1.53  a  barrel. 

In  Northern  Louisiana  the  average  is  $1.69;  in  the  Oklahoma  and 
Kansas  fields,  $1.72;  in  Northern  Texas,  $2.13;  in  the  Eastern  States, 
$2.61  a  barrel. 

Cost  of  Shale  Oil 

Now,  what  is  it  going  to  cost  to  produce  the  crude  shale  oil?  We 
must  admit  that  it  has  not  been  produced  in  a  commercial  way  to  such 
an  extent  that  we  can  be  sure  of  our  figures,  but  I  have  gone  into  the 
matter  pretty  carefully,  and  I  believe  the  outside  figure  for  mining  our 
shale,  the  outside  figure  under  the  most  adverse  conditions,  will  be  $1.25 
a  ton. 

The  retorting  of  it  I  will  put  at  the  highest  possible  figure  under  the 
most  adverse  circumstances,  which  will  be  about  60  cents.  So  I  make 
$1.85  as  the  largest  amount  that  could  be  expended  in  producing  a  barrel 
of  our  shale  oil. 

Now,  if  that  is  the  maximum  figure  for  the  production,  and  these 
prices  that  I  have  read  to  you — ranging  from  $1.53  to  $2.61 — are  prices 
in  the  market  today,  and  steadily  increasing,  I  think  it  is  perfectly  fair 
and  reasonable  to  say  that,  as  soon  as  commercial  plants  are  established 
and  we  are  producing  our  shale  oil,  it  certainly  will  come  into  com- 
petition with  the  better  grades  of  oil  from  wells. 

I  have  worked  that  out  very  carefully,  because  I  feel  that  is  the  critical 
thing  in  connection  with  the  entire  shale  oil  industry,  that  question  of 
the  cost  of  production  and  the  competition  with  petroleum  from  wells. 

It  is  not  my  purpose,  of  course,  to  consume  the  afternoon — there  are 
others  whom  we  have  invited  to  speak — but  I  do  wish  to  emphasize  to 
you  this  thought  that  I  began  with:  That  we  must  look  upon  this  oil 
shale  industry  as  a  new  industry ;  the  dawn  of  it  is  here ;  we  are  the  first 


100  REPORT  OF  PROCEEDINGS 

body  of  men  to  get  together  to  have  the  privilege  of  organizing  an  oil 
section  as  a  part  of  The  American  Mining  Congress. 

This  is  the  birthday  of  this  industry.  For  my  part,  I  shall  remember 
it  for  a  long,  long  time,  and  I  feel  particularly  pleased  that  it  was  my 
privilege  to  open  this  session.  I  hope  that  you  will  all  join  with  me  in 
feeling  the  same  way,  that  you  are  privileged  to  be  one  and  join  in  the 
work  that  we  have  for  the  afternoon.  [Applause.] 

MR.  J.  A.  EDE  (La  Salle,  111.)  :  What  are  the  other  by-products 
from  the  shale? 

By-Products  from  Shale 

CHAIRMAN  ALDERSON:  There  is  a  string  of  by-products  as 
long  as  your  arm.  You  can  go  to  the  chemical  manufacturers  and 
can  get  scores  and  scores  of  them,  but  the  main  ones,  of  course,  after 
crude  oil,  would  be  the  gasoline,  kerosene,  lubricating  oil,  paraffin  and 
ammonium  sulphate.  This  is  the  last  (exhibited  sample),  the  asphaltic 
base  or  the  paraffin  wax. 

DELEGATE :     He  means  the  silica. 

CHAIRMAN  ALDERSON:  There  is  no  silica  or  lime  in  there;  this 
is  shale. 

MR.  EDE:     What  can  you  do  with  the  shale  when  the  oil  is  out  of  it? 

CHAIRMAN  ALDERSON:  To  the  best  of  my  knowledge,  they  have 
not  succeeded  in  doing  anything  with  it;  they  throw  it  away. 

MR.  C.  W.  TERRY  (Illinois) :  May  I  ask  why  it  could  not  be  used 
for  the  purpose  of  making  tile  or  vitrified  brick  or  something  of  that  kind? 

CHAIRMAN  ALDERSON:  It  might  be;  there  are  a  lot  of  things 
about  it  that  we  do  not  know.  I  think,  generally  speaking,  that  efforts 
to  make  use  of  the  spent  shale  have  thus  far  been  commercially  unavailing. 
In  Scotland  I  do  not  think  they  have  done  anything  with  it,  because  one 
of  the  features  of  the  landscape  around  Edinburgh  are  these  piles  of 
spent  shale. 

MR.  EDE :  It  would  have  the  same  appearance  as  the  shale  we  have 
in  our  mines  here.  It  does  make  a  very  good  road  material.  What 
kind  of  roof  have  you  got  for  that  bedding  and  what  condition  is  it  in? 
I  mean  the  shale  beds  you  speak  about  after  the  mining  of  it. 

CHAIRMAN  ALDERSON:  At  no  place,  with  one  exception,  has  the 
mining  of  shale  gone  to  any  considerable  length  on  the  ground.  In 
Colorado,  in  Washington  and  in  Utah,  where  they  are  going  to  extract 
the  shale  now,  they  are  virtually  going  against  the  shale  and  breaking 
it  off  and  putting  it  into  cars.  At  Elko,  Nevada,  the  seam  is  about  six 
feet  deep.  There  they  are  going  down  on  the  incline  for  370  feet. 

MR.  EDE:  Has  it  been  tested  over  any  considerable  area;  how  many 
miles  did  you  say  there  was  of  it? 

CHAIRMAN  ALDERSON:  In  Colorado  we  estimate  we  have  2,500 
square  miles. 


THE  AMERICAN  MINING  CONGRESS  101 

MR.  EDE :     Is  there  any  variance  in  the  quality  of  it? 

CHAIRMAN  ALDERSON:  None,  so  far  as  anybody  has  discovered. 
I  went  into  Mr.  Antoine's  property,  and  I  went  down  the  incline  75 
feet  and  it  looked  the  same.  I  went  through  the  cross-cuts  and  it  looked 
the  same,  and  they  said  they  had  not  seen  any  difference  in  the  analysis. 

At  Grand  Valley,  in  Colorado,  where  these  great  cliffs  exist,  there  is 
a  seam  of  shale  that  runs  from  10  to  20  feet  thick  that  you  can  see  on 
these  hills  in  and  out  on  the  banks  for  a  total  distance  of  69  miles,  and 
it  is  virtually  the  same  all  the  way. 

MR.  EDE :  In  making  your  estimate  on  $1.85  did  you  take  in  all 
expense? 

CHAIRMAN  ALDERSON:  The  details  are  in  this  book  (referring 
to  Colorado  School  of  Mines  Quarterly) .  I  do  not  recall  what  the  details 
were,  but  it  includes  depreciation  and  everything  else.  Those  figures 
are  intended  to  cover  everything  we  could  think  of. 

MR.  EDE:     In  what  formation  is  that? 

CHAIRMAN  ALDERSON:  In  Colorado  it  is  in  the  Green  River 
formation.  I  will  be  glad  to  answer  any  questions  I  can.  We  have  a 
regular  program,  but  I  realize  that  in  the  minds  of  some  of  you  there 
may  be  doubtful  questions,  and  if  I  can  clear  them  up  I  will  be  glad  to. 

I  will  say  that  this  quarterly  I  prepared  not  for  the  scientific  and 
technical  man,  but  for  the  sake  of  giving  a  comprehensive  view  to  the 
entire  industry,  so  that  the  ordinary  man  could  find  out  something  about 
the  industry  in  the  way  in  which  he  wanted  it,  although  there  are  some 
technical  features  in  the  pamphlets.  You  gentlemen  are  privileged  to 
take  all  you  want,  and  if  there  are  not  enough,  leave  your  cards  and  I 
will  send  them  to  you. 

MR.  B.  J.  ROBERTS  (Indiana)  :  Do  you  obtain  all  the  by-product 
the  same  as  from  the  well? 

CHAIRMAN  ALDERSON:     Yes. 

MR.  EDE:  Professor,  will  you  please  explain  how  you  treat  it  in 
the  retorts? 

CHAIRMAN  ALDERSON:  May  I  say  that  there  is  a  gentleman 
who  is  going  to  talk  on  that  this  afternoon;  that  is  technical,  and  I 
would  rather  not  go  into  it. 

Plan  Permanent  Organization 

Inasmuch  as  this  is  an  organizing  section  —  and  it  is  perfectly 
natural  when  free  Americans  get  together  to  organize — we  are  expected 
to  organize  and  make  this  permanent,  as  a  part  of  The  American  Min- 
ing Congress.  I  think  it  would  be  well  to  do  a  little  business  at  once, 
and  possibly  appoint  a  committee  to  be  considering  matters  and  report 
to  us  later.  I  will  receive  suggestions  on  that  matter. 

MR.  GEO.  L.  NYE  (Colorado)  :  Mr.  Chairman,  I  move  a  committee 
of  three  on  organization  of  an  Oil  Shale  Section  be  appointed  by  the 


102  ..^ t_        £    ,    REPORT  OF  PROCEEDINGS 

chairman  to  take  up  the  question  of  submitting  a  plan  for  a  permanent 
organization  to  this  body  at  some  hour  to  which  the  body  may  adjourn. 

(Motion  duly  seconded,  put  and  carried.) 

(The  chairman  appointed  Messrs  George  L.  Nye,  of  Denver;  A.  G. 
Mackenzie,  of  Salt  Lake  City,  and  Dr.  G.  M.  Butler,  of  the  University 
of  Arizona,  as  such  committee.) 

CHAIRMAN  ALDERSON:  There  are  three  gentlemen  to  talk  to  us 
this  afternoon  and  I  am  going  to  ask  Mr.  J.  B.  Jones,  who  has  done  a 
great  deal  of  work  on  the  experimental  basis  on  oil  shale,  to  tell  us  some- 
thing of  the  experimental  side  of  the  problem.  I  take  pleasure  in  intro- 
ducing Mr.  Jones,  of  Kansas  City. 

(Mr.  Jones'  address  will  appear  on  page  634.) 

Metallic  Content  of  Shale 

CHAIRMAN  ALDERSON:  I  wish  to  add  to  what  Mr.  Jones  said  in 
regard  to  the  metallic  contents  of  the  oil  shale.  At  the  Colorado  School 
of  Mines  we  have  succeeded  in  getting  samples  of  the  shale  that  were 
reputed  to  contain  gold,  silver  and  platinum.  We  have  tried  them  in 
two  different  departments  of  the  school  by  different  workers.  I  am  ready 
to  state  officially,  and  be  quoted,  that  in  no  case  have  we  found  any  of 
the  metals  in  anywhere  near  a  commercial  basis,  and,  generally,  without 
the  slightest  trace.  That  matter  is  so  important  that  I  take  the  liberty 
of  emphasizing  what  Mr.  Jones  said. 

Those  of  us  who  are  engaged  in  a  new  enterprise  like  this  and  a  new 
industry  naturally  have  to  be  close  to  the  Government,  and  we  are 
always  glad  to  know  that  our  representatives  in  Washington  are  think- 
ing with  us  and  are  supporting  us  in  such  legislation  as  we  need. 

Encouraging  Telegrams 

I  telegraphed  to  Senator  Phipps  and  said  that  we  would  appreciate 
a  word  from  him.  I  received  this  in  answer: 

Am  interested  in  oil  shale  investigation  and  development. 
To  that  end  have  advocated  special  legislation  for  thorough  in- 
vestigation and  experiments  by  the  Bureau  of  Mines.  Under- 
stand the  Bureau  of  Mines  is  conducting  some  investigation  in 
Nevada  and  some  experiments  in  Utah,  and  would  strongly  urge 
that  the  States  and  all  parties  interested  supplement  and  con- 
tinue such  efforts  as  far  as  possible. 

Congressman  Taylor  is  also  interested,  and  is  supporting  us.  In 
answer  to  my  telegram  he  sends  me  this : 

I  am  glad  to  learn  The  American  Mining  Congress  will,  at 
this  session,  form  an  Oil  Shale  Section.  The  vast  possibilities 
of  the  oil  shale  industry  are  certainly  of  sufficient  importance  to 
warrant  this  action  by  the  Mining  Congress.  I  think  its  most 
important  object  should  be  to  discover  and  thoroughly  disseminate 
information  as  to  the  best  possible  methods  of  treatment  of  the 


THE  AMERICAN  MINING  CONGRESS  103 

ore,  and  thereby  save  enormous  waste  and  loss  and  subsequent 
discouragement  to  development.  Practical  and  scientific  informa- 
tion is  what  is  most  needed.  The  Coal  and  Oil  Leasing  Bill  has 
passed  the  Senate  and  House  and  is  now  before  a  Conference 
Committee  of  which  I  am  a  member. 

We  have  tentatively  agreed  to  all  the  provisions  concerning 
oil  shale.  They  are  practically  the  same  as  I  inserted  in  the  bill 
a  year  ago.  Also  in  this  bill  the  provisions  are  very  liberal,  and 
I  am  confident  will  encourage  and  be  the  basis  of  a  marvelous 
development  in  the  future.  The  bill  will  not  pass  at  this  session, 
which  will  adjourn  in  a  few  days,  but  it  may  pass  in  December, 
and  if  not,  it  certainly  will  pass  in  January. 

I  feel  that  the  oil  shale  industry  of  the  ocuntry  has  every 
reason  to  be  hopeful  of  a  marvelously  profitable  future. 

(Signed)     EDWARD  TAYLOR. 

In  connection  with  this  experimental  work,  it  must  be  observed  that 
the  Government  and  Bureau  of  Mines  have  done  all  they  can  in  experi- 
mental work,  and  they  are  at  work  on  problems  of  the  oil  shale  at  the 
present  time. 

We  shall  know  about  some  of  this  work  that  is  going  on  now,  and  the 
problems  that  are  being  worked  out  in  the  Bureau  of  Mines,  from  the 
gentleman  himself,  who  is  engaged  upon  that.  I  refer  to  Mr.  Marvin  J. 
Gavin,  of  the  Bureau  of  Mines,  now  at  work  at  the  Salt  Lake  Station. 
Mr.  Gavin.  [Applause.] 

MR.  GAVIN:  Mr.  Chairman,  Gentlemen  of  The  Mining  Congress: 
The  official  program  has  announced  that  I  shall  address  you  on  "Gov- 
ernment Investigation  of  Oil  Shale  Possibilities."  That  is  not  exactly 
right.  I  have  chosen  for  my  talk  "Some  Problems  in  American  Oil  Shale 
Industry,"  but  before  concluding  I  will  briefly  outline  plans  the  Bureau 
of  Mines  has  made  in  carrying  out  certain  investigation  work. 

(Mr.  Gavin's  address  will  appear  on  page  646.) 

St.  Louis  Experimental  Plant 

CHAIRMAN  ALDERSON :  It  must  be  a  source  of  very  great  satis- 
faction to  the  people  of  St.  Louis  to  know  that — irrespective  of  anything 
that  has  been  done  by  the  Bureau  of  Mines,  supported  by  the  Treasui'y 
of  the  United  States — across  the  river  there  has  been  working  for  a 
number  of  years  a  gentleman  who  was  by  his  previous  training,  his 
experience,  and  his  brain  power,  well  able  to  attack  this  problem.  And 
unaided  and  unassisted,  through  that  vital  force  that  we  are  all  proud 
of  in  American  engineers,  he  has  been  at  work  on  this  problem. 

I  think  it  not  only  wise  and  polite,  but  that  it  would  be  exceedingly 
interesting  to  us  before  we  separate,  to  hear  a  few  words  from  that  lone 
pioneer  in  the  oil  shale  industry,  who  started  his  work  before  anybody 
realized  what  he  was  about,  who  has  worked  quietly  and  systematically, 
and  has  really  done  something,  the  type  of  the  American  engineer  that  we 
love  to  recognize  and  to  honor.  I  refer  to  Mr.  George  W.  Wallace,  of 
East  St.  Louis,  Illinois.  [Applause.] 


104  REPORT  OF  PROCEEDINGS 

Methods  of  Distillation 

MR.  WALLACE :  There  has  been  so  much  said  about  the  mining  and 
other  various  factors  of  the  oil  shale  industry  that  I  think  I  will  go  on 
and  tell  you  what  we  have  accomplished  in  East  St.  Louis,  because  I 
believe  that  is  all  you  are  interested  in  from  me.  What  I  have  to  say 
will  be  almost  entirely  of  a  technical  nature. 

In  retorting  oil  shale,  irrespective  of  where  it  is  obtained,  from  Scot- 
land or  the  United  States — this  applies  also  to  coal  or  bitumens  of  any 
character — there  is  a  chemical  action  that  takes  place. 

I  have  learned  something  this  afternoon  which  has  a  vital  bearing 
on  this  phase  of  the  subject. 

Mr.  Gavin  remarked  that  in  Scotch  practice,  irrespective  of  the  shale, 
the  output  in  gallons  of  oil  was  practically  the  same.  There  is  a  reason 
for  this.  The  heat  that  is  transferred  into  the  shale,  bringing  about 
the  chemical  decomposition,  is  utilized  in  a  chemical  reaction.  The  more 
hydrocarbon  or  bitumen  in  the  shale  to  which  heat  is  applied,  the  more 
heat  is  required  to  bring  about  this  chemical  decomposition,  and,  under 
certain  conditions,  the  greater  length  of  time  is  required  to  bring  about 
the  decomposition. 

In  other  words,  the  decomposition  of  oil  shale  is  a  chemical  reaction 
and  the  more  oil  that  is  producible,  the  greater  the  reaction  and  the 
greater  the  amount  of  heat  required.  This  accounts  for  the  fact  that 
a  unit  plant  will  yield  approximately  the  same  amount  of  oil  per  day, 
irrespective  of  the  through-put  in  tons  of  shale. 

Decomposed  by  Heat 

In  studying  decomposition  reactions,  we  have  determined  that  when 
decomposition  of  shale  by  heat  takes  place  there  is  an  immediate  rear- 
rangement of  the  elements  in  the  form  of  new  compounds,  which,  broadly 
stated,  are  capable  of  existing  at  the  higher  temperature;  this  we  term 
the  primary  decomposition  of  the  shale.  A  certain  definite  amount  of 
heat  is  required  to  bring  about  this  primary  decomposition;  no  less  will 
do.  There  must  be  available  enough  heat.  There  results  from  this 
primary  decomposition  a  long  chain  of  hydrocarbons  from  gasses  to 
heavy  oils. 

Under  ordinary  conditions  of  retorting,  the  primary  decomposition 
products  are  subjected  to  a  high  degree  of  temperature  for  a  relatively 
long  period  of  time.  The  result  of  the  prolonged  heat  treatment  is  a 
secondary  decomposition,  resulting  in  the  formation  of  oils  of  a  some- 
what different  character,  increasing  the  proportion  of  unsaturated  hydro- 
carbons, which  Mr.  Gavin  has  spoken  of,  as  well  as  the  quantity  of 
permanent  gasses,  and  decreasing  the  quantity  of  condensed  oil. 

All  hydrocarbons  when  heated  above  the  boiling  point  decompose. 
The  boiling  point  of  practically  all  of  the  hydrocarbons  with  which  we 
deal  is  very  much  below  the  temperature  at  which  the  shale  is  decom- 
posed with  the  formation  of  oils.  The  character  of  the  oil  and  its  value 
are  determined  by  the  degree  of  secondary  decomposition.  Briefly,  what 


THE  AMERICAN  MINING  CONGRESS  105 

we  accomplish  in  the  Wallace  Process  is,  limiting  the  decomposition  of 
the  shale  to  the  primary  decomposition,  immediate  removal  of  the  primary 
oils  formed  before  secondary  decomposition  takes  place. 

We  do  this  by  placing  in  an  ordinary  type  of  retort  or  oven  a  perforated 
cast-iron  chamber,  applying  a  vacuum  at  the  outlet  connection  located 
at  the  bottom  of  this  chamber. 

The  moment  the  oils  are  formed,  as  a  result  of  the  decomposition  of 
the  shale,  they  are  drawn  inward  through  the  cooler  portion  of  the  shale 
in  the  retort,  and  condensing,  are  removed  downwardly  through  the 
bottom.  Therefore,  the  temperature  of  formation  is  the  highest  tempera- 
ture to  which  the  oils  are  subjected  at  any  stage  during  the  process. 

Time  is  too  short  to  tell  you  all  of  the  results  that  accrue.  We  limit 
the  thickness  of  the  shale  to  that  which  we  have  found  to  be  the  most  effi- 
cient, and  in  our  plant  in  East  St.  Louis  the  thickness  we  are  using  now 
represents  the  same  thickness  as  in  the  biggest  plant  we  will  ever  build — 
that  is,  3Vz  inches. 

Requires  One  Hour 

The  time  required  to  bring  about  the  chemical  decomposition  of  the 
shale,  under  such  conditions,  is  approximately  one  hour. 

We  believe  we  have  succeeded  in  reducing  the  percentage  of  unsaturated 
hydrocarbons  in  the  resultant  shale  oil  by  approximately  one-half;  we 
have  hopes  of  being  able  to  reduce  it  even  below  this  point.  We  have 
produced  oils  under  extreme  adverse  conditions,  containing  approximately 
35  per  cent,  unsaturated  hydrocarbons. 

We  believe  we  have  achieved  much  toward  the  development  of  the  oil 
shale  industry  in  bringing  about  conditions  that  limit  the  decomposition 
of  the  shale  to  the  primary  decomposition.  I  believe  I  have  taken  about 
all  the  time  allotted  me. 

MR.  EDE :     What  is  the  temperature? 

Temperatures   Necessary 

MR.  WALLACE :  Oil  shale  begins  to  decompose  at  about  212  degrees. 
The  decomposition  continues  through  the  entire  range  of  temperature 
up  to  750  degrees.  We  have  evidence  which  leads  us  to  believe  that 
the  decomposition  is  complete  between  700  and  750  degrees  Fahrenheit. 

We  know  of  an  experiment  that  has  been  made  recently  where  a  mass 
of  shale  was  heated  at  a  temperature  of  about  600  degrees  for  about 
an  hour,  during  which  time  the  volatile  products  consisted  principally 
of  gasses  which  would  not  burn.  Upon  raising  the  temperature  above 
that,  I  am  sure  the  oil  production  which  we  obtain  would  be  recovered. 

MR.  TERRY:     May  I  inquire  what  shale  you  have  tested? 

Yield  Per  Ton 

MR.  WALLACE :  The  first  Colorado  shale  we  experimented  with  in 
East  St.  Louis,  something  like  two  years  ago,  was  from  Parachute  Creek 
District  in  Colorado.  It  ran  58  gallons  of  oil  per  ton,  which  was  a  very 


106  REPORT  OF  PROCEEDINGS 

great  surprise  to  us.  We  had  been  working  almost  entirely  with  bitu- 
minous coals  up  to  that  time,  and  I  assure  you  my  interest  was  imme- 
diately directed  toward  Colorado  oil  shale.  I  am  not  sure  who  furnished 
that  sample,  but  I  believe  that  Mr.  Bellis  shipped  it  to  me. 

We  had  samples  of  oil  shale  from  different  parts  of  Colorado,  one 
or  two  from  Nevada,  and  later  we  made  a  very  extensive  investigation 
of  the  oil  shales  of  Utah. 

In  addition  to  the  statements  which  Mr.  Jones  made  relative  to  the 
extent  of  the  deposits,  I  would  say  that  we  have  had  our  engineers  trace 
a  strata  about  12  miles  extending  from  Dragon  to  White  River  Station, 
Utah.  Allowing  for  analytical  errors  in  testing  samples  of  shale,  I 
would  say  that  this  strata  did  not  differ  two  gallons  per  ton  of  shale 
throughout  the  entire  district. 

There  are  various  strata.  I  have  one  particular  case  in  mind,  cover- 
ing about  250  acres,  of  which  we  made  a  very  careful  survey.  Three  strata 
of  oil  shale  existed,  the  top  one  yielding  53  gallons  and  being  approxi- 
mately 20  feet  thick;  below  that  a  strata  yielding  30  gallons,  and  below 
that  a  strata  yielding  forty-odd  gallons  per  ton  of  shale. 

I  have  another  instance  in  mind  where  there  is  a  stratification  that 
is  even  greater  than  this,  over  1,100  feet  of  shale  leading  from  60  gallons 
down  to  20  gallons  of  oil  per  ton. 

MR.  TERRY:  May  I  inquire  if  you  tested  any  Illinois  shale,  which 
I  understand  contains  80  gallons  of  oil? 

MR.  WALLACE :  We  have  had  so-called  shale  from  two  points  in 
Illinois,  but  we  have  not  classified  it  as  shale.  Our  reason  is  this :  The 
oil  recovered  contains  from  20  to  30  per  cent,  tar  acids.  The  oil  from 
Colorado  shale,  using  the  ordinary  analytical  methods,  does  not  yield 
any  tar  acids.  Bituminous  coal,  local  Illinois,  yields  an  oil  containing 
from  25  to  35  per  cent,  tar  acids;  therefore,  I  have  in  my  own  mind 
classified  this  Illinois  shale  as  a  very  high  ash  cannel  coal. 

Missouri  Shales  Very  Rich 

In  Missouri  we  have  found  some  true  oil  shale,  classified  along  the 
lines  I  have  explained.  This  oil  shale  will  yield  from  25  to  30  gallons 
of  oil  refining  gasoline,  and  paraffin  hydrocarbons  instead  of  tar  acids. 

MR.  ROBERTS:  How  much  does  the  ordinary  bituminous  coal  run 
in  oil? 

MR.  WALLACE :  In  the  neighborhood  of  20  to  25  gallons  of  oil  per 
ton;  under  normal  conditions  of  carbonization,  from  8  to  10  gallons. 

Doctor  Alderson  has  prompted  me  on  a  very  important  point.  Tomor- 
row afternoon  at  2  o'clock  we  will  operate  our  research  plant.  Anybody 
who  wishes  to  come  will  be  welcome.  We  will  endeavor  to  start  a  charge 
of  Colorado  shale  at  2  o'clock,  so  I  would  suggest  that  you  endeavor  to 
start  about  1.15  o'clock. 

[Forty-eight  delegates  visited  the  plant  of  the  Wallace  Coke,  Oil 
and  By-Products  Company  in  East  St.  Louis  on  Thursday  afternoon  and 


THE  AMERICAN  MINING  CONGRESS  107 

watched  a  complete  demonstration  of  shale  oil  distillation.  It  was  pro- 
nounced a  very  interesting  and  instructive  feature  of  the  Convention 
program.] 

Report  of  Organization  Committee 

CHAIRMAN  ALDERSON:  The  committee  appointed  to  consider  a 
plan  for  permanent  organization  is  ready  to  report. 

MR.  MACKENZIE:  Mr.  Chairman  and  Gentlemen:  I  am  making 
this  report  in  behalf  of  Mr.  Nye,  the  chairman  of  the  committee.  Mr. 
Nye  is  chairman  of  the  Convention's  General  Resolutions  Committee, 
which  went  into  session  at  5  o'clock,  and  he  asked  me  to  present  this 
matter. 

This  report  provides  for  an  informal  organization.  That  is  necessary 
because  we  ascertained  that  the  constitution  of  the  Mining  Congress 
requires  notice  and  amendment  before  formal  organization  of  an  oil 
division  can  be  accomplished.  For  that  reason  we  have  provided,  as 
you  will  see,  for  an  informal  organization.  The  report  is  as  follows : 

We  recommend  that  an  Oil  Shale  Division  of  The  American 
Mining  Congress  be  informally  organized  by  the  creation  of  an 
Oil  Shale  Committee  of  seven  members  elected  by  this  body,  with 
power  to  choose  its  own  chairman; 

That  the  general  secretary  of  the  Congress  be  the  secretary 
of  such  committee; 

'That  meetings  of  the  committee  be  held  from  time  to  time, 
as  may  be  determined  by  them  in  conference  with  the  general 
secretary  of  the  Congress; 

That  the  general  purpose  of  the  committee  shall  be  to  advance 
the  Oil  Shale  Industry  generally  during  the  intervals  between 
meetings  of  The  American  Mining  Congress; 

That  those  members  of  the  Congress  interested  in  the  industry 
and  desirous  of  co-operating  in  its  development,  and  who  wish  to 
be  kept  informed  on  all  matters  relating  to  it,  be  given  an  oppor- 
tunity to  enroll  their  names,  addresses  and  occupations,  and  there- 
by become  members  of  such  Oil  Shale  Division. 

GEO.  L.  NYE,  Chairman, 

G.  M.  BUTLER, 

A.  G.  MACKENZIE, 

Committee  on  Organization. 

MR.  MACKENZIE :    Mr.  Chairman,  I  move  the  adoption  of  the  report. 

(Motion  duly  seconded,  put  and  carried.) 

MR.  MACKENZIE :  In  accordance  with  the  report,  Mr.  Chairman,  I 
suggest,  if  agreeable  to  the  meeting,  that  the  Chair  ask  for  nominations, 
unless  it  is  the  purpose  to  hold  a  subsequent  meeting. 

CHAIRMAN  ALDERSON:  There  is  no  suggestion  of  another  meet- 
ing that  I  know  of. 

MR.  MACKENZIE :  The  point  I  had  in  mind  was  that  we  should  get 
started.  The  first  thing  we  know  the  Convention  will  be  over  and  we 
vron't  have  anything  done.  The  report  recommends  a  committee  of 
seven  members  to  be  elected  at  this  meeting,  that  the  committee  select 


108  REPORT  OF  PROCEEDINGS 

its  own  chairman,  and  that  the  general  secretary  of  the  Congress  be 
the  secretary  of  the  committee. 

CHAIRMAN  ALDERSON :  You  have  heard  the  suggestion;  what  will 
you  do  with  it,  gentlemen? 

MR.  BELLIS:  In  selecting  this  committee,  I  hope  you  will  select  it 
from  the  various  States.  Missouri  has  done  so  much  here — we  certainly 
had  two  pioneers  in  Missouri;  one  happens  to  be  an  associate,  Mr.  J.  B. 
Jones,  and  the  other  is  Mr.  Wallace.  I  regard  him  as  a  fine  young  engi- 
neer and  pioneer,  and  I  would  like  to  recommend  to  you  now  in  selecting 
this  committee  that  you  take  two  from  Missouri,  Mr.  Jones  and  Mr. 
Wallace,  if  you  can. 

DELEGATE:     Mr.  Wallace  belongs  to  Illinois. 

MR.  BELLIS :  I  suggest  two  from  Utah,  one  from  Nevada,  one  from 
Illinois,  and  one  from  Missouri,  and  I  do  not  want  to  lose  you  and  Mr. 
Nye  from  Colorado.  I  want  to  get  Doctor  Alderson,  George  Nye  from 
Colorado,  J.  B.  Jones  from  Missouri,  Mr.  Wallace  from  Illinois,  Doctor 
Lincoln  from  Nevada,  and  a  couple  of  men  from  Utah.  I  cannot  nominate 
them  all,  but  I  would  like  to  nominate  Mr.  Wallace. 

MR.  MACKENZIE:  I  am  somewhat  confused,  Mr.  Chairman.  Mr. 
Bellis,  as  I  caught  him,  mentioned  yourself,  Mr.  Nye,  Mr.  Wallace  of 
Illinois,  Mr.  Jones  of  Missouri,  Doctor  Lincoln,  and  two  men  from  Utah. 

CHAIRMAN  ALDERSON:  I  would  suggest  the  name  of  Mr. 
Mackenzie. 

MR.  MACKENZIE:  If  it  is  desired  to  have  two  from  Utah,  let  me 
nominate  Mr.  J.  B.  Jensen,  of  Utah,  and  I  should  like  to  have  the  privilege 
of  proposing  another  good  oil  shale  man  to  be  associated  with  Mr. 
Jensen,  of  Utah — that  is,  assuming  I  am  elected. 

(Motion  offered  that  nominations  be  closed.  Motion  duly  seconded, 
put  and  carried.) 

CHAIRMAN  ALDERSON :  I  will  take  the  liberty  of  calling  a  meeting 
of  the  committee  of  seven  at  12.15  o'clock  tomorrow.  Is  there  any  further 
business  to  come  up? 

Thanks  to  Government  Representative 

MR.  BELLIS:  Mr.  Chairman,  I  have  read  a  great  deal  about  Scotch 
processes,  volumes  and  volumes  have  been  printed,  but  this  article  which 
Mr.  Gavin  read  on  Scotch  processes  is  the  best  thing  I  have  heard.  I 
have  seen  some  things  from  the  Federal  Bureau  of  Mines  that  I  think 
are  wild,  but  his  recommendations  and  his  paper  here  are  in  fine  shape. 
I  would  like  to  afford  him  the  thanks  of  this  audience,  and  I  would  like 
to  have  that  passed  on  to  his  chief.  That  is  about  as  good  a  paper  as 
I  have  ever  heard  from  the  Federal  Bureau  of  Mines.  I  move  that  there 
be  a  vote  of  thanks  to  Mr.  Gavin. 

(Motion  duly  seconded.) 

MR.  WALLACE:  I  had  in  my  mind,  a  few  moments  ago,  the  idea 
to  put  that  suggestion  of  Mr.  Bellis'  in  some  form  of  a  resolution,  espe- 
cially with  reference  to  the  establishment  of  this  experimental  station. 


THE  AMERICAN  MINING  CONGRESS  109 

I  do  not  believe  this  meeting  should  consider  itself  properly  closed  until 
some  action  is  taken,  putting  itself  on  record  relative  to  a  matter  as 
important  as  this. 

I  believe  we  are  all  thoroughly  in  favor  of  an  experimental  station, 
and  I  believe  we  are  heartily  in  favor  of  the  plan  as  mapped  out  by 
Mr.  Gavin.  Therefore,  I  move  that  this  section  of  oil  shale  men,  if  we 
are  in  existence  as  such,  draw  up  a  resolution  to  cover  the  subject 
properly. 

CHAIRMAN  ALDERSON:  I  think  that  has  already  been  done,  Mr. 
Wallace.  The  resolution  has  gone  before  the  General  Congress  and  has 
been  approved,  and  it  was  the  first  one  that  went  through.  I  think  that 
covers  it  nicely. 

MR.  WALLACE :     I  am  glad  to  know  that. 

MR.  ROBERTS:  I  want  to  ask  several  questions  of  Mr.  Wallace 
and  Mr.  Jones.  I  gained,  from  what  Mr.  Gavin  said,  that  this  shale, 
after  being  quarried,  must  be  crushed,  reduced,  but  they  did  not  know 
yet  to  what  degree,  in  order  to  make  it  the  greatest  commercial  success, 
to  get  the  greatest  amount  of  petroleum  and  its  by-products  out  of 
it.  I  understood  from  Mr.  Jones  that  that  was  not  necessary,  except 
to  reduce  the  very  large  pieces — for  instance,  like  that  one  (indicating 
sample) — to  pieces  not  to  exceed  six  or  eight  inches  in  size.  I  want  to 
get  that  a  little  clear  before  the  assembly  and  for  my  own  information. 

I  also  gleaned  from  Mr.  Gavin's  report  that  we  did  not  know  yet,  from 
a  commercial  standpoint,  as  to  whether  or  not  the  petroleum  produced 
from  our  oil  shale  in  this  country  would  be  of  such  color  and  odor  that 
they  might  require  a  further  treatment — what  process,  I  do  not  know — 
before  they  could  be  used  as  commercial  products.  I  should  like  these 
two  questions  explained,  if  possible. 

CHAIRMAN  ALDERSON:    Mr.  Jones,  can  you  answer  the  question? 

Quality  of  Petroleum 

MR.  JONES:  I  would  be  glad  to  answer  the  gentlemen  so  far  as  we 
have  been  able  to  determine.  I  think  Mr.  Roberts  will  recall  that  I 
qualified  my  remarks  by  saying  that  the  shale  was  crushed  to  various 
degrees  of  fineness  according  to  the  process  adopted;  that  there  is  no- 
set  rule  excepting  that  the  different  processes  used  different  degrees 
of  crushing,  and  that  if  a  process  were  adopted  which  required  very 
fine  crushing,  it  would  increase  the  cost  of  operations.  I  think  that  was 
in  fact  my  statement,  and  leaving  that  to  the  individual  engineer  accord- 
ing to  the  conditions  met  in  his  mechanism. 

Now,  as  to  quality  of  petroleum  we  have  found,  as  Mr.  Wallace  and 
Mr.  Gavin  have  stated,  that  varying  degrees  of  temperature  change 
materially  the  quality  of  the  oils,  and  change  materially  the  refining 
value  of  the  oils,  or  the  refined  value  of  the  oils  after  they  are  passed 
through  the  refining  process.  We  will  admit  that  shale  oils  require 
more  treatment  in  the  way  of  agitating,  washing  and  re-running  than 
petroleum  oils,  and  in  our  tables  we  have  allowed  for  the  additional 


110  REPORT  OF  PROCEEDINGS 

expense  of  such  treatment.  But  we  also  find  that  the  oils  can  be 
cleaned,  scrubbed  and  deodorized  so  that  they  are  commercially  good 
oils,  and  as  far  as  the  standard  of  the  value  of  the  oil  is  concerned, 
we  rely  on  the  test  made  by  the  Bureau  of  Standards  in  Washington, 
which  we  think  is  the  ultimate  authority  in  this  country. 

The  Oil  Shale  Industry 

(Chairman  Alderson  presented  an  exhaustive  report  of  the  investiga- 
tions of  the  Colorado  School  of  Mines  into  the  feasibility  of  oil  shale 
development.  Dr.  Alderson's  paper  "The  Oil  Shale  Industry"  appears 
on  page  616.) 

CHAIRMAN  ALDERSON:    Is  there  any  further  business? 

MR.  RICE  (United  States  Bureau  of  Mines)  :  I  want  to  compliment 
my  associate  on  his  paper.  It  might  be  of  slight  interest  to  give  a  few 
observations  I  made  in  Scotland  last  June.  I  went  there  to  look  into 
the  mining  side  of  the  shale  industry  and  visited  a  number  of  typical 
mines  and  observed  the  character  of  the  Scotch  oil  shale. 

Geological  Formations 

I  do  not  know  much  about  the  oil  shale  of  this  country,  much  as  I 
have  been  through  the  West  in  search  of  other  minerals,  but  I  am 
impressed  with  the  appearance  of  a  sample  of  this  shale  on  the  chair- 
man's table,  which,  if  it  is  characteristic,  indicates  the  Rocky  Mountain 
oil  shale  is  quite  different  in  texture  from  that  I  saw  in  the  shale  mines 
in  Scotland.  There  the  beds,  as  indicated  by  one  of  the  previous  speakers, 
have  been  folded  by  violent  geologic  disturbances  and  the  shale  shows 
much  slickening  due  to  the  movement  which  occurred  in  that  folding 
process.  The  oil  shale  in  the  mine  as  you  shoot  it  down  in  the  room 
breaks  into  rather  small  pieces.  If  you  take  a  typical  piece,  it  is  lens- 
like  in  shape  and  may  be  a  foot  or  18  inches  or  so  in  diameter,  and  pos- 
sibly five  or  six  inches  thick,  with  sharp  edges,  and  most  of  the  faces 
are  slickensided.  It  breaks  up  if  you  throw  it  down,  with  a  sound  like 
breaking  crockery,  and  although  it  shoots  rather  hard,  it  is  brittle  and 
does  not  take  so  much  crushing  to  break  it  small.  Whereas  this  sample 
on  the  table  looks  dense,  tough,  and  hard  to  crush.  I  assume  that  it 
-would  be  vital  to  the  rapidity  of  distillation  that  you  should  have  pieces 
of  such  a  size  as  to  not  take  too  long  for  the  heat  to  penetrate  in  through 
the  mass  of  any  piece.  Therefore,  the  cost  of  crushing  should  be  care- 
fully considered  as  well  as  other  factors.  I  firmly  believe  that  the  oil 
shale  business  in  this  country  some  time  is  going  to  be  a  very  great  one, 
but  we  should  not,  I  think,  be  too  extravagant  in  our  ideas  to  start  as 
to  large  net  profits  from  the  by-products  as  well  as  from  the  direct  oil 
products. 

Cost  Will  Compare  to  Coal 

Now,  as  far  as  the  mining  is  concerned,  shale  generally  shoots  pretty 
hard,  and  it  would  probably  not  be  safe  to  take  a  lower  cost  than  the 


THE  AMERICAN  MINING  CONGRESS  111 

cost  of  producing  coal,  at  least  until  the  operations  become  so  large 
that  you  can  perhaps  use  special  methods  in  thick  shale  beds.  For 
instance,  the  Scotch  oil  shale  masters  were  compelled  by  an  arbitration 
award  many  years  ago  to  adopt  the  coal  miners'  scale  and  follow  its 
fluctuations  regardless  of  conditions  in  the  oil  business.  From  what  Mr. 
Gavin  tells  me,  something  has  happened  since  I  was  there  in  June,  the 
oil  shale  miners  becoming  willing  to  recede  from  that  position;  but  in 
June  the  owners  did  not  know  what  would  be  the  future  of  the  business, 
as  with  oil  dropping  to  normal  prices  they  were  losing  money  under  the 
mining  scale  they  then  had  to  pay  and  with  threatened  increases  under 
the  Sankey  award  to  coal  miners. 

Safer  Than  Coal  Mining 

In  the  matter  of  the  methods  of  handling  the  mines,  as  was  pointed 
out  by  the  chairman,  the  Scotch  oil  shale  mines  are  subject  to  the  same 
regulations,  coming  under  the  same  act,  as  the  coal  mining  act.  It  was 
my  observation  that  oil  shale  mining  in  Scotland  seemed  safer  than  the 
average  coal  mining.  They  have  not  been  troubled  with  fire  damp,  and 
they  have  no  trouble  there  from  explosibility  of  the  shale  dust,  but  I 
note  that  it  is  pointed  out  in  the  Colorado  report  the  possibility  of  the 
dust  from  the  oil  shale  being  explosive,  and  that  must  be  taken  into 
account  and  determined. 

As  to  Dust  Explosions 

Mr.  Lunt,  of  Colorado,  has  asked  the  Bureau  to  carry  on  some  explosive 
tests  on  the  oil  shale  dust.  As  the  writer  has  been  in  general  charge  of 
the  dust  explosibility  work  of  the  Bureau,  it  occurs  to  him  the  principal 
questions  in  this  matter  are: 

(1)  What  is  the  percentage  of  non-combustibility  in  the  shale?   In  the 
case  of  coal  dust  50  or  75  per  cent,  will  render  the  coal  dust  non-explosive, 
the  percentage  varying  with  the  size  of  particles  for  the  same  purity 
of  dust. 

(2)  Does  the  volatile  matter  of  the  oil  shale  distill  off  more  readily 
than  that  of  the  coal?    In  other  words,  is  the  oil  shale  dust  more  sensitive 
in  taking  fire? 

(3)  Is  fire  damp  likely  to  be  present? 

Perhaps  a  little  additional  inert  material  distributed  in  the  mine  pas- 
sages would  eliminate  the  danger  of  dust-explosion  propagation.  A  more 
important  question  at  this  time  is  what  is  likely  to  be  the  cost  of  mining 
and  crushing.  Can  these  costs  be  reduced  to  a  point  where  business 
will  be  profitable?  The  distillation  and  refining  end  I  do  not  know  about, 
but  that  is  perhaps  more  certain  of  success  than  the  mining  in  which 
labor  cost  is  the  big  factor. 

Estimated  Costs 

MR.  H.  F.  LUNT:  Mr.  Chairman,  I  can  add  a  little  to  what  Mr. 
Rice  has  said.  In  the  investigation  made  by  Mr.  Dowling  and  myself, 


112  REPORT  OF  PROCEEDINGS 

we  fixed  on  a  $1.25  minimum  cost  for  mining  the  shales  in  Colorado,  but 
subsequent  investigations  have  led  me  to  believe  that  that  is  probably 
too  small;  it  would  probably  be  between  $1.50  and  $2,  i.  e.,  charging 
everything  to  mining  that  should  properly  be  charged.  Of  course,  the 
actual  cost,  without  including  operating,  mining  and  overhead  expenses, 
can  probably  be  kept  to  $1.25,  but  I  very  much  doubt  if  it  can  be  any 
less.  Professor  George's  figures,  to  which  Mr.  Jones  referred,  were 
preparatory  figures. 

MR.  RICE :    Those  could  not  have  included  all  costs. 

MR.  LUNT:  I  do  not  think  they  included  anything  except  the  actual 
mining  cost;  I  do  not  think  they  included  any  overhead  cost. 

CHAIRMAN  ALDERSON:  I  might  answer  to  that  the  answer  of 
Mr.  Sheer.  They  have  been  working  for  several  years;  they  are  down 
370  feet,  and  they  have  done  a  good  deal  of  actual  work.  He  told  me 
it  was  costing  them  a  little,  less  than  $1.25,  everything  included.  That 
is  what  they  are  doing  now,  and  that  is  why  I  was  willing  to  take  my 
figures  at  $1.25,  because  it  is  being  done. 

Is  there  any  further  business? 

MR.  BELLIS :  Do  I  understand  that  in  Nevada  they  are  going  down 
and  hoisting  for  $1.25? 

CHAIRMAN  ALDERSON:  Yes,  rather  less  than  that,  but  it  would 
be  safe  to  say  $1.25. 

MR.  RICE:     Do  you  know  the  scale  paid  to  miners? 

CHAIRMAN  ALDERSON:     $4  or  $4.50. 

It  has  been  moved  and  seconded  that  a  vote  of  thanks  be  extended 
to  Mr.  Gavin  for  his  excellent  paper.  Those  in  favor  will  please  signify 
by  saying  "Aye";  contrary,  "No." 

(Motion  carried.) 

Furthermore,  that  a  copy  of  this  resolution  be  sent  to  Director  Man- 
ning himself. 

MR.  BELLIS:  Mr.  Chairman,  I  do  not  know  whether  it  is  necessary 
or  not,  but  if  anyone  is  nominated  on  that  committee  who  is  not  a  mem- 
ber of  The  American  Mining  Congress  and  declines  to  become  such,  some 
provision  should  be  made  for  the  rest  of  the  committee  to  fill  the  vacancy. 

CHAIRMAN  ALDERSON:  Suppose  you  make  a  motion  that  that 
committee  be  empowered,  if  they  find  that  any  of  those  seven  are  not 
members,  to  supply  the  deficiency  themselves. 

MR.  BELLIS :     I  make  that  a  motion. 

(Motion  duly  seconded,  put  and  carried.) 

CHAIRMAN  ALDERSON:  I  wish,  gentlemen,  as  a  final  word,  you 
would  remember  this  meeting  as  of  the  19th  day  of  November,  1919,  as 
a  birthday  of  the  Oil  Shale  Industry.  [Applause.] 

We  will  now  stand  adjourned. 


THE  AMERICAN  MINING  CONGRESS  113 

COAL  SECTION 

American  Mining  Congress 

WEDNESDAY  AFTERNOON,  NOVEMBER  19,  1919 
CONVENTION  HALL,  EXPOSITION  BUILDING 

The  meeting  convened  at  3.10  P.  M. 

ASSISTANT  SECRETARY  BURNS:  Gentlemen,  in  the  absence  of 
Mr.  Carl  Sholz,  director  of  The  American  Mining  Congress,  who  was  to 
have  been  chairman  this  afternoon,  we  have  asked  Mr.  Paul,  of  Pitts- 
burgh, to  take  charge  of  this  meeting.  The  session  has  been  delayed 
because  of  a  misunderstanding  regarding  the  necessity  for  building  a 
moving  picture  booth.  We  now  have  that  up  and  are,  I  think,  ready 
to  work.  I  have  some  resolutions  presented  for  reading,  and,  as  you 
know,  all  resolutions  must  be  referred  to  the  Resolutions  Committee 
without  any  debate. 

(Mr.  Burns  read  resolutions,  which  were  referred  to  the  Resolutions 
Committee  without  debate.) 

CHAIRMAN  PAUL:  Again,  I  wish  to  make  note  of  the  invitation 
from  the  Mayor  of  the  city  and  the  Entertainment  Committee  of  St. 
Louis  to  the  delegates  or  visitors  accompanied  by  the  ladies  to  visit  the 
Chain  of  Rocks  on  Saturday.  Automobiles  will  leave  the  Planters'  Hotel 
at  9.30  o'clock.  In  order  to  make  that  trip  you  will  please  register  at 
the  Planters'  Hotel. 

On  account  of  the  lateness  of  the  meeting  this  afternoon  it  will  be 
necessary  to  expedide  matters  and  go  on  with  our  set  program  as  rapidly 
as  possible,  in  order  that  you  may  all  have  an  opportunity  to  see  a 
series  of  moving  pictures  depicting  "The  Story  of  Coal."  Similarly,  on 
account  of  the  late  start  this  forenoon,  one  feature  of  the  morning's 
program  was  not  concluded.  We  have,  however,  the  speaker  with  us 
this  afternoon,  Mr.  A.  F.  Duffy,  manager  of  the  Safety  Section  of  the 
Railroad  Administration,  Division  of  Operation,  who  will  now  address 
you  on  the  subject  of  "Result  of  Safety-First  Movement  Upon  Labor." 
Mr.  Duffy.  [Applause.] 

(Mr.  A.  F.  Duffy's  address  will  appear  on  page  661.) 

CHAIRMAN  PAUL:  We  certainly  appreciate  the  reliable  information 
that  the  speaker  has  just  given  us,  and  it  is  believed  that  by  following 
some  of  the  suggestions  made  in  this  forenoon's  meetings  on  similar  lines, 
results  may  be  accomplished.  Following  the  next  speaker  will  be  shown 
the  first  reel  of  "The  Story  of  Coal,"  which  will  be  shown  under  the 
direction  of  Mr.  Leopold,  who  will  make  any  necessary  explanations  in 
connection  with  the  pictures. 

The  next  speaker  on  "Coal  vs.  Oil  in  Power  Production"  is  Mr.  Charles 


114  REPORT  OF  PROCEEDINGS 

S.  Allen,  secretary  of  the  Wholesale  Coal  Trade  Association,  of  New  York 
City.  Mr.  Allen.  [Applause.] 

(Mr.  Allen's  address  will  appear  on  page  668.) 

CHAIRMAN  PAUL :  Mr.  Allen  in  his  address  has  given  the  coal  men 
something  on  the  subject  of  which  they  could  well  afford  to  give  some 
serious  thought.  On  account  of  the  next  paper  being  on  an  important 
subject,  and  being  a  short  address,  we  will  defer  until  after  its  delivery 
the  showing  of  the  moving  picture  "The  Story  of  Coal,"  which  will  fol- 
low immediately  after  the  next  address.  The  next  speaker  will  address 
you  on  the  subject  of  "What  is  the  Cause  of  the  Present  Labor  Dis- 
content?" Mr.  James  Taylor,  special  Mines  Investigator,  of  the  Depart- 
ment of  Mines  and  Minerals  of  Illinois.  [Applause.] 

(Mr.  Taylor's  address  will  appear  on  page  684.) 

CHAIRMAN  PAUL :    The  secretary  has  some  announcements  to  make. 

Ludlow  Address  Postponed 

ASSISTANT  SECRETARY  BURNS :  Doctor  Ludlow  has  very  kindly 
consented  to  postpone  his  address  until  tomorrow  at  10  o'clock.  It  is 
filled  with  interest  and  it  will  have  a  bearing  generally  on  the  anthracite 
question. 

"The  Story  of  Coal"  will  be  shown  to  you  and  described  by  Mr.  Leopold, 
who  will  explain  the  object  of  this  picture. 

In  behalf  of  the  Committee  on  Resolutions,  I  will  state  that  this  Com- 
mittee will  meet  at  its  room  in  the  Planters'  Hotel  tomorrow  morning  at 
9.30  o'clock.  All  members  are  asked  to  be  present  and  be  prompt.  There 
will  be  an  opportunity  for  those  interested  in  any  pending  resolutions 
to  address  the  Committee.  The  Committee  on  Industrial  Resolutions 
will  meet  in  Parlor  "H"  of  the  Planters'  Hotel.  Tomorrow  afternoon 
the  Resolutions  Committee  will  make  its  first  report,  and  I  understand 
there  are  some  very  interesting  subjects  to  cover  in  that  report.  Tomor- 
row morning  at  10  o'clock  the  Coal  Section  will  meet  at  this  building. 
Tomorrow  morning,  in  the  Planters'  Hotel,  there  will  be  a  meeting  of 
the  Mines  Taxation  Section,  at  which  there  will  be  a  number  of  dis- 
tinguished speakers. 

The  Chairman  introduced  Joseph  D.  Davis,  assistant  supervising 
chemist  of  the  United  States  Bureau  of  Mines,  who  discussed  By-Product 
Coking  a  Means  of  Conserving  Our  Fuel  Resources. 

(The  paper  appears  on  page  297.) 

CHAIRMAN  PAUL:  The  further  proceedings  of  the  afternoon  will 
now  be  taken  in  charge  by  Mr.  Leopold. 

The  Story  of  Coal 

MR.  MORTON  F.  LEOPOLD:  Mr.  Chairman,  Ladies  and  Gentlemen: 
There  have  been  many  requests  on  the  Bureau  of  Mines  throughout  the 
country  for  a  motion  picture  showing  the  development  of  coal,  and  the 
matter  was  taken  up  at  the  National  Coal  Association  meeting  and  through 


THE  AMERICAN  MINING  CONGRESS  115 

the  co-operation  of  the  Coal  Association  with  the  Bureau  the  film  which 
you  see  was  made.  The  majority  of  views  were  taken  in  the  State  of 
Illinois,  as  the  equipment  was  there  and  it  was  impossible  to  transport 
it  from  mine  to  mine.  We  took  the  interior  views  rapidly  on  account 
of  the  great  heat. 

(Whereupon  the  picture  was  put  upon  the  screen  and  was  explained 
by  Mr.  Leopold.) 


116  REPORT  OF  PROCEEDINGS 

THURSDAY  MORNING,  NOVEMBER  20,  1919 
EXPOSITION  BUILDING 

The  meeting  was  called  to  order  at  10.45,  Dr.  Henry  Mace  Payne 
presiding. 

Chairman  Payne  made  several  announcements  relative  to  changes 
in  the  program.  He  also  called  attention  to  the  importance  of  the  busi- 
ness to  come  before  the  evening  session  of  the  Congress. 

CHAIRMAN  PAYNE :  Gentlemen,  the  first  paper  we  have  this  morn- 
ing is  by  Mr.  J.  C.  Thompson,  director  of  the  Department  of  Mines  and 
Minerals  of  the  State  of  Illinois,  who  will  discuss  "Stabilization  of  the 
Coal  Market,  Through  Storage." 

This  is  a  very  vital  question  for  the  coal  market  today.  Dr.  Manning 
discussed  how  we  could  stabilize  the  work  of  the  miners  by  having  a 
continuous  output  throughout  the  year.  I  take  great  pleasure  in  intro- 
ducing Mr.  Thompson. 

(Mr.  Thompson's  address  will  appear  on  page  691.) 

Speakers  Asked  to  Summarize  . 

CHAIRMAN  PAYNE:  Several  of  the  speakers  this  morning  have 
consented  to  summarize  their  papers  in  order  that  we  may  get  to  the 
high  points  and  then  digest  them  carefully  in  the  proceedings.  We  have 
a  number  of  speakers  yet  to  appear.  This  is  a  good  time  to  emphasize 
the  importance  of,  for  instance,  the  question  of  standardization  which 
appeals  to  us  in  regard  to  the  various  markets  and  different  grades  of 
coal.  Also  in  connection  with  the  export  problems,  the  question  of  dif- 
ferent standards  of  coal.  I  will  not  take  your  time,  however,  but  we 
all  appreciate  having  with  us  the  Government's  foremost  authority  upon 
that  question,  a  gentleman  who  has  given  a  great  deal  of  study  to  this 
matter.  It  will  be  your  privilege  to  hear  Mr.  George  S.  Rice,  who  will 
discuss  "Standardization  of  Coal,  Uniform  Inspection  and  Classification." 

(Mr.  Rice's  address  will  appear  on  page  699.) 

Export  Committee  Report 

Chairman  Payne,  who  was  also  chairman  of  the  Coal  Export  Com- 
mittee of  The  American  Mining  Congress,  presented  the  report  of  that 
committee  as  submitted  to  the  Board  of  Directors  of  the  Congress,  as. 
follows : 

NEW  YORK  CITY,  November  10,  1919. 
To  the  President  and  Board  of  Directors, 

The  American  Mining  Congress: 

GENTLEMEN  :  As  the  demands  for  American  coal  in  European 
and  South  American  ports  increased,  subsequent  to  the  Armistice 
of  November,  1918,  conditions  surrounding  the  export  coal  in- 
dustry became  more  and  more  chaotic. 

With  the  abolition  of  Fuel  Administration  control  on  February 
1,  1919,  a  mushroom  army  of  would-be  coal  exporters  grew  up 
overnight.  A  single  "firm  offer"  for  10,000  tons  became  a  propo- 
sition for  1,000,000  tons  in  the  hands  of  100  prospective  ex- 
porters, all  bidding  against  one  another,  and  many  of  whom  were 
unable  to  guarantee  either  quality  or  delivery. 


THE  AMERICAN  MINING  CONGRESS  117 

Out  of  this  pandemonium  came  demoralizing  demands  for  ship- 
ping facilities,  utterly  beyond  any  human  means  of  supplying. 
Also  after  the  first  shipments  began  to  arrive,  complaint  was 
made  of  irregularity  in  quality  and  the  fact  that  much  of  the 
coal  so  shipped  was  not  up  to  specifications. 

To  meet  these  conditions,  a  conference  was  held  by  the  United 
States  Shipping  Board  at  Washington  in  May,  1919,  with  a  view 
to  establishing  a  standard  of  procedure  in  the  allocation  of  ton- 
nage. The  United  States  Bureau  of  Mines,  viewing  the  coal 
export  proposition  as  a  relief  measure,  became  interested  in 
establishing  standards  of  quality  for  American  coals  so  exported, 
and  it  became  evident  that  unless  some  form  of  export  organiza- 
tion was  created,  our  prestige  would  be  lost,  and  the  export  of 
American  coal  materially  hampered,  through  competitive  selling 
in  foreign  markets. 

Repeated  attempts  were  made  by  various  organizations,  such 
as  the  National  Coal  Association  and  others,  to  form  a  national 
export  company,  but  without  success.  A  few  of  the  larger  oper- 
ating companies  had  or  made  their  own  export  arrangements. 
A  portion  of  these  utilized  the  existing  machinery  of  the  Tide- 
water Coal  Exchange,  while  others  went  into  the  shipping  busi- 
ness and  began  a  C.  I.  F.  delivery,  with  the  result  that  ocean 
freight  rates  rapidly  exceeded  United  States  Shipping  Board 
rates  and  keen  competition  again  threatened  to  disrupt  all 
attempts  at  standardization  of  selling  price  for  established 
grades  of  coal. 

Mining  Congress  Crystallizes  Movement 

At  this  stage  it  occurred  to  The  American  Mining  Congress 
that  seme  constructive  action  should  be  taken  as  a  means  of  co- 
ordinating ideas,  and  crystallizing  them  into  some  practical  plan 
calculated  to  meet  the  approval  of  all  parties  interested  in  the 
exporting  of  coal.  It  was  generally  agreed  that  such  action  was 
necessary,  in  view  of  the  growing  dissatisfaction  abroad,  and  the 
tendency  toward  collective  buying,  already  established  with  re- 
spect to  many  commodities  in  international  trade. 

Your  committee  was  fortunate  in  securing  the  collaboration 
of  Mr.  Allen  Walker,  of  the  Guaranty  Trust  Company,  who  has 
studied  at  first  hand  the  methods  and  activities  of  the  buying 
and  selling  combinations  of  Europe,  and  of  Mr.  Gilbert  H.  Mon- 
tague, an  attorney  of  extended  experience  in  the  organization 
of  export  corporations  under  the  Webb-Pomerene  law.  A  series 
of  conferences  have  been  held  at  which  the  various  associations 
and  representatives  of  operators  and  wholesalers  and  the  Bureau 
of  Mines  have  been  present  and  participated  in  the  discussions. 

The  success  of  similar  export  organizations  in  the  cement, 
steel,  lumber,  chemical,  meat  products,  textile,  foundry,  furni- 
ture, copper  and  other  industries,  to  meet  collective  buying  with 
collective  selling,  is  now  a  matter  of  record.  It  remains  only 
for  the  coal  industry  to  similarly  avail  itself  of  the  wonderful 
advantages  of  the  Webb-Pomerene  Act,  which  extends,  to  coal 
operator  and  wholesaler  alike,  an  opportunity  to  eliminate  cut- 
throat competition  in  foreign  markets,  to  stabilize  domestic 
trade,  and  to  develop  home  production  by  the  creation  of  a 
regular  and  sustained  output  overseas  for  years  to  come.  In 
addition,  the  buyer  will  be  assured  of  a  high  standard  of  quality 
and  service  as  to  American  coal. 

Tentative  Organization  Formed 

As  a  result  of  these  conferences,  extending  over  the  past  five 
months,  a  tentative  form  of  organization  based  on  the  combined 


118  REPORT  OF  PROCEEDINGS 

necessities  of  the  various  responsible  exporters  is  now  before 
the  committee  for  final  adoption.  It  had  been  hoped  that  this 
work  might  be  completed  before  the  annual  session  of  The  Amer- 
ican Mining  Congress,  but  on  account  of  the  coal  strike  many 
of  the  operators  interested  in  export  were  obliged  to  defer 
attendance  at  the  proposed  meeting.  Your  committee,  therefore, 
respectfully  submits  this  report,  with  the  recommendation  that, 
in  the  appointment  of  an  Export  Committee  for  the  ensuing 
year,  the  Congress  reappoint  a  sufficient  number  from  the  pres- 
ent committee  already  familiar  with  its  labors  to  insure  the 
speedy  completion  of  the  organization,  after  which,  its  functions 
having  been  performed,  the  committee  may  readily  be  dissolved. 
In  response  to  many  inquiries  which  have  been  made  as  to  the 
likelihood  of  the  continuance  of  conditions  warranting  an  ex- 
port organization,  Mr.  George  S.  Rice,  of  the  United  States 
Bureau  of  Mines,  has  stated  that  it  will  probably  be  at  least 
five  years  before  Great  Britain  resumes  her  normal  export  ton- 
nage, and  that  the  annual  European  shortage  is  now  90  to 
100  million  tons.  It  is  estimated  that  the  United  States  should 
have  a  permanent  annual  export  trade  of  at  least  22  million 
tons  to  Mediterranean  ports  for  the  next  ten  years,  and  a 
steadily  growing  demand  of  at  least  nine  million  tons  annually 
to  South  America.  All  that  is  necessary  to  secure  and  hold  this 
trade  is  an  honorable  method  of  doing  business  on  a  collective 
selling  basis,  with  an  established  standard  of  uniform  quality. 

Briefly  summarized,  the  proposed  organization  provides  for  a 
coal  export  corporation  which  shall  obtain,  through  organization, 
the  benefits  of  co-operation  intended  by  the  Webb-Pomerene 
bill,  and  which  shall,  by  its  Board  of  Directors,  regulate  the 
grading,  classification,  shipment,  handling  and  delivery  of  coal 
for  export  trade. 

The  export  organization  provides  for  and  protects  individual 
trade  names,  and  established  agencies,  and  contemplates  the 
creation  of  a  corporation  which  shall  engage  solely  in  export 
trade  as  defined  by  the  Webb  Act,  together  with  the  acquisition 
of  ships  by  charter,  purchase,  or  otherwise,  and  whose  Board  of 
Directors  shall  be  elected  by  stockholders. 

There  seems  to  be  little  reason  why  the  American  coal  in- 
dustry should  lack  the  proper  organization  for  export,  to  place 
it  upon  the  same  sustained  basis  as  other  major  industries  in 
the  United  States. 

Respectfully  submitted, 

(Signed)     HENRY  M.  PAYNE,  Chairman, 
VAN  H.  MANNING, 
CHARLES  S.  ALLEN, 
JOHN  C.  CALLAHAN, 
ALLEN  WALKER. 

CHAIRMAN  PAYNE :  Mr.  Edwin  Ludlow,  who  is  known  to  us  all, 
is  with  us  this  morning,  and  will  speak  to  us  on  the  "Result  to  the 
Anthracite  Industry  of  the  Government  Price  Fixation  Policy." 

MR.  LUDLOW :  Mr.  Chairman  and  Gentlemen :  In  selecting  the  title 
of  this  paper,  "Price  Fixation,"  I  felt  that  I  was  coming  out  into  a 
country  where  anthracite  was  more  of  a  luxury  than  a  necessity,  and 
this  paper  was  written  accordingly. 

(Mr.  Ludlow's  address  will  appear  on  page  711.) 

CHAIRMAN  PAYNE :  It  is  always  a  pleasure  to  have  with  us  those 
gentlemen  who,  by  virtue  of  the  nature  of  their  work,  have  passing  over 
their  desks  all  the  different  views  of  the  various  problems  which  are  so 


THE  AMERICAN  MINING  CONGRESS  119 

pertinent  to  the  mining  industry.  One  of  these  men,  who  is  well  known 
to  us  in  his  capacity  as  editor  of  the  "Coal  Age,"  as  a  skillful  reviewer 
of  conditions  as  applied  to  the  mining  industry,  is  Mr.  R.  Dawson  Hall, 
managing  editor  of  the  "Coal  Age,"  New  York  City,  who  will  address 
us  on  "The  Industrial  Clean-Up." 

(Mr.  Hall's  paper  will  appear  on  page  717.) 

Statement  on  Export  Report 

CHAIRMAN  PAYNE :  We  will  adjourn  in  just  a  moment.  My  atten- 
tion has  been  called  to  the  fact  that  one  item  was  omitted  in  the  report 
of  the  Export  Committee  which  should  come  to  your  attention — namely, 
that  ocean  freight  rates  and  ocean  insurance  rates  are  several  hundred 
per  cent,  higher  in  the  case  of  insurance,  and  very  much  higher  in  the 
case  of  freight  during  the  winter  than  in  the  summer,  and  also  that  it 
suits  most  foreign  countries  better  to  receive  coal  between  May  and 
October.  The  fact  is  that  exporting  coal  in  a  large  degree  would  tend 
to  stabilize  the  output  of  American  mines,  and  would  be  a  great  factor 
in  furnishing  regular  work  for  the  miners  throughout  the  year. 

Also,  it  is  a  fact  that  foreign  nations  have  now  combined  and  are 
using  collective  buying  methods,  and  we  should  meet  collective  buying 
by  collective  selling. 

There  will  be  the  regular  afternoon  session  here,  and  the  other  ses- 
sions will  all  convene  at  2  o'clock.  There  will  be  a  number  of  resolu- 
tions to  be  introduced  at  that  time.  I  will  now  read  you  this  resolution 
which  has  been  sent  over  to  be  referred  to  you: 

Resolution  on  Stabilizing  Coal  Production 

WHEREAS,  A  more  uniform  production  of  bituminous  coal 
throughout  the  year  would  stabilize  work  at  the  mines  and  allay 
the  dissatisfaction  among  workers  due  to  irregular  work  and 
give  a  more  economical  production  of  coal  through  the  better 
utilization  of  equipment  and  invested  capital;  and 

WHEREAS,  More  uniform  production  would  more  equally  dis- 
tribute the  transportation  of  coal  throughout  the  year,  thus 
relieving  the  railroads  during  the  fall  and  winter  seasons,  when 
agricultural  products  must  be  transported,  and  when  the  cost  of 
transportation  is  most  expensive;  and 

WHEREAS,  It  is  only  feasible  for  the  ultimate  consumer  to 
store  for  future  use  coal  produced  in  excess  of  current  demands, 
and  as  the  time  for  such  storage  of  coal  from  April  1  to  Sep- 
tember 1  best  meets  the  above  conditions;  and 

WHEREAS,  It  is  necessary  to  stimulate  the  buying  of  coal  dur- 
ing this  period  by  lowering  the  price  of  coal;  therefore,  be  it 

Resolved,  That  the  proper  authorities  be  requested  to  reduce 
the  freight  rate  on  coal  during  the  above-mentioned  period,  and 
that  suitable  legislation  be  enacted  to  permit  the  bituminous 
coal  operator  to  fix  a  definite  price  for  coal  that  may  be  lower 
during  the  above-mentioned  period  than  for  the  balance  of  the 
year. 

I  will  turn  this  over  to  the  Resolutions  Committee. 

In  conclusion,  let  me  remind  you  that  Mr.  Montague  has  the  forms  for 
the  proposed  export  corporation  here,  and  if  any  of  you  are  interested 
in  it,  he  will  be  glad  to  talk  to  you. 

ADJOURNMENT. 


120  REPORT  OF  PROCEEDINGS 

MINES  TAXATION  SECTION 

THURSDAY  MORNING,  NOVEMBER  20,  1919 

The  Taxation  Section  convened  at  10  o'clock  at  the  Planters'  Hotel. 
Dr.  R.  C.  Allen,  Vice-President  of  The  Lake  Superior  Iron  Ore  Asso- 
ciation, Cleveland,  Ohio,  formerly  a  member  of  the  Advisory  Board  of 
the  Internal  Revenue  Bureau,  was  the  presiding  officer. 

Chairman  Allen  introduced  Secretary  Callbreath,  of  The  American 
Mining  Congress,  who  asked  permission  to  introduce  several  resolutions 
for  first  reading.  Permission  being  given,  the  Secretary  read  two  reso- 
lutions covering  suggested  activities  in  behalf  of  gold  producers. 

CHAIRMAN  ALLEN:  The  first  paper  on  the  program  this  morning 
is  "Mine  Accounting  in  Relation  to  Federal  Taxation,"  presented  by 
Mr.  Wade  Kurtz,  a  Consulting  Accountant,  of  Kansas  City. 

(The  paper  by  Mr.  Kurtz  will  be  found  on  page  166.) 

CHAIRMAN  ALLEN:  Gentlemen,  the  paper  read  by  Mr.  Kurtz  is 
undoubtedly  suggestive  of  a  great  deal  of  promise,  which  it  would  be 
very  profitable  to  discuss,  and  which,  I  think,  will  be  discussed  before 
this  meeting  is  closed.  I  think  we  .should  take  up  discussion  after  the 
papers  are  read.  We  will  now  hear  Mr.  George  E.  Holmes  on  "Taxa- 
tion of  Income  from  Mining." 

(The  paper  by  Mr.  Holmes  will  be  found  on  page  180.) 

CHAIRMAN  ALLEN:  We  will  hear  the  remaining  paper  before  tak- 
ing up  the  discussion.  I  take  pleasure  in  introducing  at  this  time  Mr. 
T.  0.  McGrath,  who  has  prepared  to  discuss  "Protection  Against  Unjust 
Taxation."  Mr.  McGrath  is  from  Bisbee,  Arizona. 

MR.  McGRATH:  Mr.  Chairman  and  Gentlemen — In  order  to  bring 
a  discussion  of  this  subject  within  the  time  limit  of  20  minutes,  I  will 
have  to  confine  myself  to  the  main  facts.  I  wish  to  say  that  I  am  con- 
nected with  a  company  which  spent  four  and  a  half  million  dollars  and 
15  years  of  service  in  trying  to  make  a  mine.  It  looks  as  though  in  the 
next  year  or  two  they  would  make  a  mine.  In  that  case  they  will  have 
to  pay  an  income  tax  and  an  excess  profits  tax  on  everything  over  eight 
per  cent.,  regardless  of  the  fact  that  they  have  had  an  investment  for 
15  years  with  no  returns.  The  points  I  will  bring  out  are  mostly  a 
discussion  of  the  justice  of  that  phase. 

(Mr.  McGrath 's  paper  will  appear  on  page  195.) 

CHAIRMAN  ALLEN:  The  last  paper  on  the  program  will  be  read 
by  Mr.  A.  P.  Ramstedt,  Comptroller  of  the  Hercules  Mines  at  Wallace, 
Idaho. 

(Mr.  Ramstedt's  paper  on  "Income  Tax  as  Applied  to  Mines,"  will 
appear  on  page  207.) 

CHAIRMAN  ALLEN:  The  question  of  Federal  Income  Tax  will  now 
be  open  for  discussion. 

MR.  BATES:  What  arrangements  have  been  made  for  the  printing 
of  the  papers  just  read  before  this  Convention? 

CHAIRMAN  ALLEN:  I  understand  they  will  be  printed  in  the 
regular  Journal  of  the  Congress. 


THE  AMERICAN  MINING  CONGRESS  121 

MR.  BATES:  Mr.  Chairman,  I  should  like  to  have  it  definitely  ascer- 
tained, as  I  consider  these  papers  of  great  importance  to  the  mining 
industry,  and  that  they  should  have  the  widest  publicity.  I  am  anxious 
to  secure  a  complete  set,  and  I  take  it,  others  in  the  business  are  as 
deeply  interested. 

CHAIRMAN  ALLEN:  There  is  some  time  remaining  before  luncheon 
for  discussion  on  these  papers.  I  will  call  upon  Dr.  Arnold,  who  had 
a  great  deal  to  do  with  the  writing  of  the  regulations. 

DR.  RALPH  ARNOLD,  Consulting  Petroleum  Engineer  of  New  York 
and  Los  Angeles,  and  who  was  formerly  Chief  of  the  Oil  and  Mines 
Section  of  the  Internal  Revenue  Bureau  in  the  administration  of  the 
Excess  Profits  Law,  was  then  introduced  and  greeted  with  applause. 

(The  address  by  Doctor  Arnold  will  be  found  on  page  214.) 

CHAIRMAN  ALLEN:  We  have  present  with  us  a  member  of  the 
Mines  Taxation  Committee  of  the  National  Tax  Association  and  a  member 
of  the  State  Tax  Commission  of  Arizona. 

None  of  us  has  given  more  study  to  the  theoretical  and  practical 
aspect  of  this  subject  than  has  Mr.  Zander,  of  Arizona,  and  I  would  like 
to  call  upon  Mr.  Zander  to  make  some  remarks. 

(The  remarks  by  Mr.  Zander  will  appear  on  page  226.) 

CHAIRMAN  ALLEN:  Gentlemen,  is  there  any  further  discussion  of 
this  subject?  It  is  1  o'clock;  another  session  of  the  Congress  begins  at  2 
o'clock,  a  session  which  I  presume  that  many  of  us  will  desire  to  attend; 
but  before  we  adjourn  for  luncheon  I  would  like  to  call  upon  Mr.  Howe, 
of  the  State  Tax  Commission  of  Kansas,  to  say  a  final  word  on  this 
subject. 

May  I  make  a  suggestion,  Mr.  Howe?  Many  of  the  gentlemen  here 
perhaps  are  unacquainted  with  the  work  of  the  National  Tax  Association, 
and  particularly  the  work  which  the  Committee  on  Mines  Taxation,  ap- 
pointed by  the  National  Tax  Association  Committee,  will  propose  to  do. 
I  am  sure  they  would  be  interested  in  a  statement  from  the  chairman  of 
that  Commission  what  the  purposes  of  its  work  are  to  be  and  what  they 
hope  to  accomplish. 

(The  statements  of  Mr.  Howe  will  appear  on  page  229.) 
CHAIRMAN  ALLEN:  There  is  one  other  gentleman  here  whom  I 
would  like  to  call  upon,  and  I  think  we  ought  not  adjourn  until  we  have 
heard  from  Dr.  Rukard  Kurd,  Director  of  Mines  of  the  Tax  Commission 
of  Minnesota.  Dr.  Kurd  was  the  first  in  this  country  to  apply,  scien- 
tifically, the  ad  valorem  method  of  determining  the  value  of  unmined 
iron  ore. 

(The  remarks  by  Doctor  Kurd  will  be  found  on  page  230.) 
RAVENELL  MACBETH,  Secretary  of  the  Idaho  Mining  Association, 
addressed  the  Chair  and  asked  instruction  from  the  conference  to  The 
American  Mining  Congress  to  have  prepared  a  special  circular  containing 
the  papers  read  and  addresses  made  during  this  session  for  general  distri- 
bution. 

CHAIRMAN  ALLEN:  It  seems  to  be  the  general  desire  of  the  dele- 
gates present  that  this  should  be  done.  I  would  suggest  that  copies  of 
all  addresses  on  Mines  Taxation  be  furnished  the  Commissioner  of  the 
Revenue  Bureau. 

Adjourned. 


122  REPORT  OF  PROCEEDINGS 

TARIFF  CONFERENCE 

WAR  MINERALS  PRODUCERS 

American  Mining  Congress 

THURSDAY  AFTERNOON,   NOVEMBER  20,   1919 
PLANTERS'  HOTEL 

Chairman  Ross  Blake,  of  Arkansas,  presiding. 

By  consent  Secretary  Callbreath  read  several  resolutions,  which  were 
referred,  without  dabate,  to  the  Resolutions  Committee. 

By  consent  Mr.  H.  W.  Smith  read  two  resolutions  prepared  in  behalf  cf 
war  minerals  producers.  Referred  without  debate  to  Resolutions  Com- 
mittee. 

Tariff  Program  of  Mining  Congress 

CHAIRMAN  BLAKE:  We  will  hear  the  statements  of  Mr.  H.  W. 
Smith,  Chief  of  the  War  Minerals  Division  of  The  American  Mining 
Congress,  regarding  tariff  plans. 

MR.  SMITH:  Gentlemen,  it  is  well  in  opening  these  discussions  to 
first  state  the  attitude,  policy  and  functions  of  The  American  Mining 
Congress.  The  policy  of  this  organization  toward  tariff  problems  is 
well  known.  The  American  Mining  Congress  is  not  a  political  organiza- 
tion. It  favors  neither  free  trade  nor  a  protective  tariff. 

But  when  the  needs  of  this  country  for  certain  mineral  products  are 
made  so  woefully  apparent,  as  they  were  during  the  world  war,  this 
organization  must  adopt  a  policy  that  will  permit  the  American  miner 
to  fill  these  needs  from  our  abundant  reserves  of  natural  resources.  An 
urgent  appeal  to  produce  would  get  no  answer,  since  our  last  war  minerals 
experiment.  It  would  fall  on  ears  too  deafened  by  disastrous  losses. 

Industry  Must  Be  Saved 

These  mineral  industries  must  not  die.  They  must  have  a  form  of 
protection  that  will  make  them  and  the  nation  independent.  A  plan 
must  be  adopted  that  will  put  the  miner  of  war  minerals  on  a  permanent, 
self-sustaining  basis  and  on  a  competitive  level  with  cheap  foreign  labor, 
and  put  him  in  position  to  buy  his  supplies  and  equipment  in  our  present 
protected  market. 

The  miner  takes  the  raw  earth  and  from  it  produces  a  mineral  and 
an  article  of  commerce.  This,  to  the  miner,  is  his  finished  product.  It 
may  be  the  raw  material  for  many  other  enterprises,  just  as,  in  turn, 
the  finished  product  of  these  other  enterprises  becomes  the  raw  material 
of  still  further  advanced  states  of  manufacture.  The  logical  solution  for 


THE  AMERICAN  MINING  CONGRESS  123 

this  problem  of  the  miner  is  a  tariff  which  will  protect  him,  and  in 
protecting  the  miner  a  tariff  is  being  levied  to  protect  his  finished  product. 

Not  Revolutionary 

So  this  question  of  tariff  on  raw  materials  in  the  form  of  natural 
resources  of  a  diminishing  character  is  not,  after  all,  the  revolutionary 
policy  it  might  at  first  appear  to  be.  It  is  the  protection  of  the  finished 
products  of  an  industry  that  is  more  vital  to  the  needs  of  this. country 
in  time  of  war  than  any  other  one  factor.  It  is  not  the  purpose  of  this 
legislation  to  protect  any  mineral  industry  which  will  not,  by  means  of 
that  very  protection,  be  in  position  to  be  self-sustaining  within  a  few 
years. 

The  development  of  these  little  explored  ore  reserves,  and  the  installa- 
tion of  methods  to  be  made  possible  on  a  permanent  production  basis, 
will  introduce  such  economies  that  the  tariff  asked  for  in  every  case  can 
be  gradually  removed,  and  the  production  in  this  country  ultimately  get 
on  such  a  basis  of  internal  competition  that  the  resulting  price  to  the 
consumer  will  be  lowered. 

Justification  for  Tariff 

The  three  questions  which  arise  in  seeking  a  justification  for  any 
tariff  on  war  minerals  are  these: 

1.  The  extent  of  our  reserves. 

2.  The  difference  in  labor  cost  between  this  country  and  competitive 

countries. 

3.  The  effect  on  associated  industries. 

The  estimates  of  ore  reserves,  which  must  form  the  basis  for  our 
calculations,  come,  in  part,  from  the  most  accurate  official  source  that 
we  have  at  our  command — the  Geological  Survey.  The  work  of  the 
Survey  is  accurate,  but  conservative.  In  tabulations  of  actual  produc- 
tion, under  both  existing  and  past  conditions,  its  statistics  must  be  un- 
questioned, but  in  estimating  ore  reserves  two  things  must  be  taken  into 
account:  First,  the  method  of  securing  these  statistics,  and  second,  the 
constantly  increasing  reserves  opened  up  by  exploration  and  development. 

Ore  Reserves  Increasing 

Known  districts  of  production  are  examined  by  the  engineers  of  the 
Survey  and  estimates  made,  but  the  vast  undeveloped  regions  which  are 
waiting  for  the  hardy  prospector  and  adventurous  miner  are  not  con- 
sidered. There  is  no  question  but  that  in  1900  the  Geological  Survey 
would  have  told  us  that  there  were  not  100  tons  of  tungsten  ore  in  the 
United  States,  yet  this  country  has  shown  that  it  is  capable  of  producing 
annually  over  4,000  tons.  We  can  all  remember  when  Northern  Michigan 
and  the  Montana  district  were  considered  the  country's  only  sources  of 
copper  in  large  commercial  quantities.  The  statistics  which  have  been 
compiled  on  every  mineral  have  shown  conclusively  that  the  known  re- 
serves have  increased  in  each  case  more  rapidly  than  the  depletion. 


124  REPORT  OF  PROCEEDINGS 

The  idea  of  conservation  of  natural  resources  has  a  distinct  popular 
appeal,  particularly  effective  in  the  more  crowded,  settled  Eastern  district, 
where  people  could  have  no  conception  of  the  enormous  amount  of  develop- 
ment which  is  necessary  in  our  Western  States,  and  in  all  parts  of  our 
country  where  natural  resources  are  abundant,  to  bring  prosperity  to 
these  new  countries. 

The  feeling  that  we  were  depleting  our  resources  faster  than  we  were 
justified  became  widespread.  Every  person  who  proposed  conservation 
of  any  character  was  hailed  as  a  prophet.  We  find  these  ultra-conserva- 
tionists suggesting  that,  with  such  tariff  protection,  the  supply  of  these 
resources  will  rapidly  be  depleted.  They  would,  in  short,  have  us  set 
on  our  eggs  until  they  are  addled.  It  is  a  well-known  principle  of 
economics  that  as  the  demand  for  a  particular  article  increases,  and  the 
price  advances,  articles  in  substitution  for  it  come  into  use,  which  are 
oftentimes  superior  in  their  properties  to  the  original  article  of  com- 
merce. This  is  equally  true  of  mineral  resources. 

Within  the  last  few  years  we  have  witnessed  the  increasing  use  of 
dolomite  for  refractory  purposes  when  other  refractories  were  tem- 
porarily scarce.  In  the  early  days  of  the  human  race  it  is  more  than 
possible  that  prehistoric  races  wondered  what  they  would  do  when  all 
the  water  in  the  Dead  Sea  dried  up. 

Conservation  of  Inertia 

Statements  based  on  the  theory  that  the  development  of  such  industry 
means  depletion  of  these  resources  to  an  extent  which  becomes  alarming 
have  been  made.  Extreme  conservationists  are  likely  to  take  the  stand 
that  all  such  mineral  deposits  should  lie  undeveloped  until  the  urgent 
necessity  for  their  use  in  the  time  of  emergency  arises. 

Guy  C.  Riddell,  engineer  and  metallurgist  of  the  Tariff  Commission, 
sums  up  the  absurdity  of  this  in  a  statement: 

"This  is  simply  the  conservation  of  inertia.  That  an  entirely  unde- 
veloped natural  resource  in  the  time  of  a  national  emergency  is  as  useless 
as  an  entirely  depleted  one  is  evident,  and  between  the  two  we  must 
find  a  medium." 

A  consistent  use  of  our  natural  resources  and  the  development  of 
metallurgical  practice  springing  out  of  this  use  is  the  only  true  way  to 
industrial  progress. 

American  vs.  Foreign  Labor 

The  protection  of  American  labor  by  tariff  is  a  recognized  principle 
of  the  industrial  development  of  this  country,  and  we  are  applying  it  to 
the  mineral  industry.  All  labor  costs  abroad  are  unquestionably  lower 
than  our  own.  There  is  not  an  instance  of  foreign  mineral  production 
where  the  labor  cost  is  not  far  below  a  living  wage  scale  for  American 
labor.  From  the  coolie  of  China  and  Burma,  the  convict  of  New  Cale- 
donia, and  the  peon  of  Brazil,  the  American  working  man  must  be  pro- 
tected, and  the  only  way  in  which  his  wage  scale  can  be  protected  is  by 
protecting  the  industry  in  which  he  works. 


THE  AMERICAN  MINING  CONGRESS  125 

It  has  been  feared  by  producers  of  war  minerals,  who  want  this  form 
of  protection  for  their  industry,  that  stages  of  manufacture  which  use 
these  war  minerals  in  their  manufacturing  processes  would  object  to 
such  protection.  These  fears  have  been  justified,  but  while  the  strength 
of  this  opposition  and  its  significance  should  not  be  under-estimated,  at 
the  same  time  the  position  that  these  industries  take  is  inconsistent. 

This  inconsistency  has  been  recognized,  and  it  is  doubtful  if  the  selfish 
interests  of  one  branch  of  industry  will  be  finally  permitted  to  weigh 
against  true  national  protection. 

Fordney  Demands  Fairness 

Hon.  Joseph  W.  Fordney,  chairman  of  the  Ways  and  Means  Committee, 
in  the  hearings  on  graphite,  September  27,  when  the  protection  for  this 
industry  was  vigorously  opposed  by  the  interests  manufacturing  graphite, 
said:  "I  have  little  patience  with  any  branch  of  an  industry  which  has 
built  up  its  prosperity  through  a  protective  tariff,  and  which  is  now 
enjoying  that  protection,  when  it  comes  before  this  body  to  protest  against 
a  similar  protection  being  accorded  to  another  branch  of  the  same  industry 
which  will  perish  without  it." 

The  mining  industry  as  a  whole,  and  the  producers  of  war  minerals 
in  particular,  are  interested  mainly  in  results.  In  the  discussion  of 
questions  of  this  kind,  it  is  natural  for  the  people  who  are  trying  to 
achieve  these  results  to  discuss  rather  the  problems  which  must  be 
solved  before  the  results  can  be  achieved.  The  economic  problems  aris- 
ing from  a  tariff  issue,  which  steps  the  principle  of  protection  one 
further  stage  lower  down  in  the  process  of  production  and  manufacture, 
bring  up  many  intricate  economic  issues — issues  which  must  be  solved 
in  justice  and  equity  to  all  interests  involved.  In  this  discussion  these 
problems  have  been  mentioned  not  to  show  the  difficulties  which  are  in 
our  way,  but  to  show  the  constructive  work  we  must  do  to  achieve  what 
we  want. 

It  matters  little  how  wonderful  a  physique  a  man  may  have,  if  he  be 
hopelessly  paralyzed;  and  it  matters  little  what  wonderful  natural  re- 
sources this  country  may  possess  in  war  minerals,  if  they  be  hopelessly 
paralyzed. 

National  Treasury  Will  Profit 

The  income  to  the  nation  will  be  increased  by  many  millions  of  dollars 
by  the  continuous  development  of  these  natural  resources  in  the  form 
of  war  minerals.  The  burden  of  taxation,  as  distributed  through  the 
various  industries  by  these  duties,  will  be  infinitesimally  small  to  the 
ultimate  consumer. 

In  tungsten,  for  example,  the  proposed  duty  is  $1  per  pound  for  tung- 
sten contained  in  tool  steel.  One  pound  of  tungsten  tool  steel  will  con- 
tain 18  per  cent,  tungsten,  which  will  carry  a  duty  of  18  cents.  This 
pound  of  tungsten  tool  steel  will  machine  one  ton  of  machines'  steel 
products  which  will  have  a  value  ranging  from  $500  a  ton  up  to  many 


126  REPORT  OF  PROCEEDINGS 

thousands  of  dollars  per  ton.  This  is  the  form  of  product  which  finally 
reaches  the  ultimate  consumer  and  upon  which  the  final  cost  as  paid 
by  the  ultimate  consumer  is  applied.  This  increases  his  cost  by  18  cents 
on  a  product  worth  many  thousands  of  dollars. 

Slight  Tax  on  Consumer 

The  comparison  in  the  other  proposed  war  mineral  tariffs  is  the  same. 
The  additional  cost  of  graphite,  for  example,  in  an  ordinary  lead  pencil, 
under  the  proposed  tariff  duty,  would  be  less  than  one-fiftieth  of  one  cent, 
and  the  additional  cost  of  graphite  as  applied  to  the  ultimate  consumer 
in  crucible  manufacture  would  be  less  than  one  cent  for  each  $100  value 
of  product  manufactured  in  these  crucibles. 

These  tariffs  will  further  create  funds  for  the  National  Treasury  which 
will  lessen  the  tariff  burden  that  might  be  applied  upon  the  taxpayer 
at  other  points. 

The  concrete  results  of  the  tariff  fight  so  far  are  substantial  and  en- 
couraging. Bills  providing  tariff  protection  for  13  war  minerals  have 
been  introduced.  Of  these,  tungsten,  magnesite,  and  zinc  have  already 
passed  the  House  and  are  now  before  the  Senate  Finance  Committee. 
The  Ways  and  Means  Committee  of  the  House  has  held  hearings  on 
graphite  and  potash,  both  of  which  industries  made  splendid  showings 
and  received  distinctly  encouraging  expressions  of  opinion  from  this 
committee.  Neither  of  these  bills,  however,  has  yet  been  reported  to  the 
House. 

Penrose  Misquoted 

A  great  deal  of  capital  has  been  made  by  the  opponents  of  this  neces- 
sary legislation  of  the  quoted  statement  of  Senator  Penrose,  in  which 
he  was  said  to  refer  to  such  bills  as  "pop-gun  legislation."  The  facts 
are  that  a  statement  of  the  Senator,  which  was  intended  to  show  the 
grave  importance  of  questions  of  international  policies  that  are  pending 
before  the  Senate,  and  the  serious  consideration  which  must  be  given 
these  problems  first,  was  so  purposely  misconstrued  and  misquoted  as 
to  make  his  attitude  appear  to  be  distinctly  and  permanently  opposed  to 
these  vital  measures.  This  in  no  way  reflects  the  real  attitude  of  the 
leader  of  the  Senate  Finance  Committee,  nor  the  spirit  in  which  he  is 
approaching  our  internal  problems.  Senator  Penrose  recognizes  the 
vital  issues  at  stake  in  the  protection  of  war  industries. 

Not  Political  Issue 

These  questions  of  tariff  on  war  minerals  are  not  political  issues — 
they  are  not  restricted  legislation  to  benefit  certain  districts.  They 
constitute  protection  in  its  truest  form — actual  national  integrity  built 
up  through  becoming  self-sustaining  in  our  vital  war-essential  industries. 
The  whole  history  of  the  war  minerals  situation  is  enough  to  show  even 
the  casual  reader  that  no  mining  operator  could  be  induced  to  enter 
mineral  production  for  war  purposes  again  during  a  period  of  emergency. 


THE  AMERICAN  MINING  CONGRESS  127 

He  must  have,  instead,  an  opportunity  to  build  up  his  business  on  a  sub- 
stantial, permanent  basis  through  protection. 

Congressman  Longworth  struck  the  keynote  of  the  attitude  that  the 
country  is  ultimately  to  take  toward  the  protection  of  war  minerals  in 
the  hearing  on  magnesite  before  the  Ways  and  Means  Committee,  when 
certain  American  companies  owning  deposits  of  magnesite  in  Austria 
were  protesting  against  this  tariff  because  of  the  effect  it  would  have  on 
their  business.  Mr.  Longworth  said,  as  between  two  American  interests 
equally  able  to  produce  the  same  thing,  the  industry  which  can  supply 
this  country,  both  in  times  of  war  and  in  times  of  peace,  should  be  pro- 
tected as  against  the  industry  which  can  only  supply  us  in  times  of  peace. 

And  when  the  time  comes  that  this  country  needs  its  war  mineral 
industries,  operating  to  their  highest  capacity,  neither  statistics,  theories 
nor  promises  will  avail  us  anything.  We  must  have  established  pro- 
duction. The  only  way  we  can  have  it  is  to  have  these  industries  perma- 
nent, and  the  only  way  they  can  begin  to  be  permanent  is  to  have  the 
protection  of  a  tariff. 

U.  S.  Tariff  Commission 

CHAIRMAN  BLAKE:  We  are  especially  favored  today  by  having 
with  us  a  member  of  the  United  States  Tariff  Commission,  a  Westerner 
well  acquainted  with  the  requirements  of  the  mining  industry,  and  we 
will  now  hear  from  this  representative  of  the  Government,  Mr.  E.  P. 
Costigan. 

(Mr.  Costigan's  address  will  appear  on  page  726.) 

American  Quicksilver 

CHAIRMAN  BLAKE:  The  Conference  will  have  the  pleasure  of 
hearing  the  quicksilver  situation  discussed  by  the  California  State  Min- 
eralogist, Mr.  Fletcher  Hamilton. 

MR.  HAMILTON:  The  analysis  of  the  quicksilver  situation  demands 
what  you  might  call  a  "chronic  statistician"  to  fathom  the  intricacies  of 
the  problems  which  involve  production. 

I  have  kept  away,  therefore,  in  the  paper  which  I  have  prepared,  from 
entering  into  the  discussion  from  a  statistical  standpoint. 

(Mr.  Hamilton  read  paper  on  "American  Quicksilver  Situation,"  which 
will  appear  on  page  738.) 

CHAIRMAN  BLAKE:  We  would  like  to  hear  from  Mr.  Dorsey  A. 
Lyon,  of  the  United  States  Bureau  of  Mines. 

MR.  LYON:  Mr.  Chairman  and  Gentlemen:  As  most  of  you  know, 
during  the  war  the  Bureau  of  Mines  endeavored,  wherever  possible,  to 
secure  information  that  was  needed  by  the  various  Government  agencies 
in  carrying  on  the  war,  and  that  is  the  reason  why  the  investigation 
which  is  mentioned  in  the  paper  by  Mr.  R.  T.  Stull  was  brought  to  its 
attention. 

This  afternoon,  in  listening  to  Mr.  Smith,  I  was  reminded  that  not 
only  the  graphite  and  bond  clays  were  taken  up  in  connection  with  this 


128  REPORT  OF  PROCEEDINGS 

investigation,  but  a  study  has  also  been  made  of  magnesite  and  dolomite. 
In  other  words,  the  object  of  the  investigation  was  to  determine  whether 
our  needs  can  be  met  as  regards  refractories  and  graphite  crucibles  by 
our  dolomite  deposits. 

(Mr.  Lyon  read  paper  on  "The  Utilization  of  American  Graphite  and 
American  Clay  in  Ceramics,"  which  will  appear  on  page  ???) 

Mr.  Lyon  continued:  Mr.  StulPs  feeling  is  that  it  is  important  that 
we  first  be  fully  informed  of  the  behavior  of  the  bond  clays  in  this  coun- 
try before  an  extensive  study  of  the  graphites  is  made.  Once  we  get  the 
necessary  data  in  regard  to  clays,  we  can  then  use  those  clays  which  we 
find  to  be  the  best  in  making  up  crucibles.  Such  crucibles  are  being 
tested,  but  the  results  are  not  obtainable  as  yet.  It  looks  as  if  good 
results  will  be  obtained  from  using  Alabama  domestic  graphite,  and  I 
think  Mr.  Stull  feels  that  in  time  it  will  be  possible  to  secure  such  data 
as  will  enable  manufacturers  to  use,  domestic  bond  clays  and  domestic 
graphite  in  the  manufacture  of  graphite  crucibles  instead  of  imported 
clays  and  graphites. 

Another  thing  that  occurred  to  me  is  that  we  are  working  on  the 
possibility  of  using  our  domestic  white  clays  in  place  of  imported  ones. 
As  you  know,  our  domestic  clays  are  rather  irregular  in  their  composition. 
It  is  not  possible  to  predict  from  analysis  what  the  composition  of  a 
given  tonnage  of  clay  is  likely  to  be.  However,  Mr.  Stull  believes  it  is 
going  to  be  possible  to  wash  these  clays  in  such  a  manner  as  will  give 
a  product  of  even  more  uniform  composition  than  the  English  clay,  and 
there  is  no  reason  why  we  should  not  use  our  domestic  white  clay  as 
well  as  the  English. 

Another  thing  about  these  white  clays:  'There  will  probably  be  a 
time  when  England  will  put  a  protective  tariff  on  them  or  even  prohibit 
their  exportation.  Therefore,  you  can  see  that  it  is  quite  necessary  that 
we  make  it  possible  to  use  our  white  clays,  if  for  no  other  reason  than 
to  protect  those  industries  which  would  suffer  if  foreign  clays  were 
cut  off. 

Are  there  any  questions?  I  hurriedly  passed  over  this  paper,  and  if 
there  are  any  questions  I  will  be  glad  to  answer  them,  although  I  cannot 
answer  them  as  well  as  Mr.  Stull  could. 

CHAIRMAN  BLAKE:  We  would  like  to  have  Senator  Voorheis,  of 
California,  tell  us  something  about  tungsten. 

(Senator  Voorheis,  before  proceeding  with  his  address,  briefly  described 
in  a  simple  way  the  composition  of  this  interesting  mineral  which  is 
now  so  generally  used  in  connection  with  making  high-speed  tools  and 
as  a  constituent  element  in  the  composition  of  special  steel  products. 
The  Senator  then  proceeded  to  read  a  paper  prepared  for  presentation 
to  Congress  in  support  of  H.  R.  4337,  designed  to  fix  an  import  tariff 
upon  tungsten  and  tungsten  elements.) 

(The  paper  by  Senator  Voorheis  will  appear  on  page  741.) 

MR.  H.  W.  SMITH:  Mr.  Chairman,  we  had  hoped  this  afternoon  to 
have  Mr.  Pettis,  of  Cincinnati,  who  operates  the  Phillipsburg  Manganese 


THE  AMERICAN  MINING  CONGRESS  129 

Company,  to  tell  us  something  of  the  manganese  resources  of  this  coun- 
try. Mr.  Pettis  telegraphed  me  that  he  should  not  like  to  make  such 
statement  without  having  opportunity  to  verify  all  of  his  statistics,  be- 
cause his  estimates  of  manganese  ore  reserves  are  very  encouraging  to 
those  of  us  who  are  particularly  interested  in  manganese  and  the  possi- 
bilities of  its  development  under  some  form  of  protection,  so  we  will 
have  to  forego  hearing  Mr.  Pettis. 

We  had  hoped  that  Mr.  Spurr,  who  directed  the  activities  of  the  war 
minerals  work  in  the  Bureau  of  Mines  during  the  period  of  the  war, 
and  who  later  so  ably  directed  the  organization  and  formation  of  the 
War  Minerals  Relief  Commission's  investigation  of  claims,  would  talk 
to  us,  but  Mr.  Spurr  has  asked  that  he  be  excused.  While  we  regret 
losing  him  from  the  War  Minerals  Division,  we  will  always  be  particu- 
larly interested  in  the  "Engineering  and  Mining  Journal"  under  his 
editorship,  he  having  transferred  his  very  able  administrative  capacities 
to  that  work  in  New  York. 

I  am  going  to  ask  if  Mr.  Smith,  of  Alabama,  will  say  a  few  words  about 
graphite  and  the  graphite  industry  in  Alabama. 

Alabama  Graphite 

MR.  A.  E.  SMITH  (Alabama) :  Mr.  Chairman,  Ladies  and  Gentle- 
men :  A  few  minutes  ago  I  asked  Mr.  Lyon  for  Dr.  StulPs  report  on  the 
actual  results  that  were  obtained  in  using  domestic  graphite  in  domestic 
clays.  Mr.  Lyon  did  not  seem  to  have  the  figures.  However,  I  happen 
to  recall  some  figures.  In  using  100  per  cent,  of  Ceylon  graphite  the 
results  were  75%  per  unit.  As  they  increased,  the  American  graphite 
increased  the  amalgam  and  got  as  high  as  23. 

That  report  was  made  by  Dr.  Stull  in  Pittsburgh,  Pennsylvania,  and 
so  recorded  in  his  report  at  Washington,  and  I  am  going  to  ask  that 
Dr.  StulPs  report  be  added  in  detail  to  the  report  of  this  meeting. 

In  regard  to  the  Alabama  graphite  situation,  we  have  practically 
unlimited  resources;  the  area  extends  about  30  miles  in  length,  varying 
from  a  half  mile  to  three  miles  in  width.  Of  course,  the  deposit  varies 
in  richness  in  that  district. 

Our  property — I  am  stating  this  simply  as  an  illustration — covers 
nearly  80  acres,  and  we  really  figure  that  we  have  enough  ore  in  one 
vein  running  across  80  acres — using  200  tons  a  day — for  the  next  15 
years.  We  have  four  additional  veins  on  the  property.  I  am  stating 
these  things  as  facts  for  a  basis  to  confirm  the  report  that  the  supply 
is  practically  unlimited  in  Alabama. 

Prior  to  the  war  there  were  only  two  or  three  mills  running  and  in  a 
very  limited  way.  The  price  of  graphite  was  six  to  eight  cents  per  pound; 
the  price  of  labor  varied  from  75  cents  to  $1.25  per  day.  When  they 
were  not  busy  working  out  in  the  fields,  the  men  would  come  in  and 
help  work  the  graphite.  Of  course,  those  conditions  all  changed  during 
the  war. 


130  REPORT  OF  PROCEEDINGS 

War  Stimulation 

At  the  beginning  of  the  war  the  industry  was  stimulated  and  we  had 
about  40  or  50  plants  then  running  that  were  built  in  the  district  under 
the  stimulation.  At  the  present  time  every  plant  in  the  district,  except 
two  or  three,  is  shut  down  for  the  lack  of  market.  We  were  urged 
by  the  Government  to  increase  our  production;  we  were  told  that  we 
would  be  protected  under  the  War  Minerals  Bill,  and  taking  that  in  good 
faith,  we  proceeded  to  develop  our  properties. 

I  am  not,  however,  going  into  the  merits  of  the  graphite  situation  one 
way  or  the  other,  because  it  will  show  for  itself.  The  American  Mining 
Congress  examines  the  merits  of  every  case;  the  Tariff  Commission 
examines  their  merits  as  well;  so  we  will  have  to  assume,  when  it  is 
passed  upon  by  both  of  these  bodies,  that  there  is  some  merit  to  it. 

It  seems  that  all  the  war  minerals  are  in  the  same  boat,  that  we  have 
been  led  on  by  the  Government  to  expect  protection  for  our  investments, 
and  we  are  certainly  entitled  to  it.  I  think  that  it  should  be  the  purpose 
or  the  policy  of  this  Conference  to  put  its  united  support  against  or 
with  any  measure  that  has  the  approval  of  The  American  Mining  Con- 
gress or  the  Tariff  Commission  for  protective  tariff. 

Manganese  and  various  other  minerals  are  practically  in  the  same 
fcoat.  Everyone  of  us  started  under  operating  conditions  that  were 
abnormal.  We  were  new  in  the  business  and  started  in  developing  a 
new  industry.  I  know  our  costs  when  we  started  were  three  times  what 
they  are  at  the  present  time.  We  have  an  investment  of  $275,000  that 
will  not  represent  today  $25,000  in  salvage.  But  we  have  a  process  now 
by  which,  inside  of  a  year,  if  developed,  we  can  compete  with  foreign 
labor. 

At  the  present  time  our  competition  is  against  six  to  eight  cents  a  day 
labor  in  Soudan  and  Madagascar.  I  believe  that  is  the  position  other 
war  minerals  are  in.  Therefore,  I  would  make  a  suggestion  that  this 
Conference,  or  this  Section,  before  adjourning,  prepare  a  resolution  that 
we  support  all  war  minerals  that  have  the  approval  of  The  American 
Mining  Congress  and  the  Tariff  Commission. 

Representative  Speakers 

MR.  H.  W.  SMITH:  Mr.  Chairman  and  Gentlemen:  Oftentimes  we 
are  inclined  to  feel — when  just  a  few  of  us  get  together  like  this — that 
the  meeting  does  not  have  the  significance  that  it  would  have  if  there 
'were  a  group  of  several  hundred,  but  it  was  interesting  to  us  to  realize 
that  this  afternoon  we  have  had  representing  graphite,  quicksilver,  and 
tungsten,  men  talk  to  us  who  are  the  official  spokesmen  for  men  repre- 
senting many  millions  of  dollars  invested  during  the  war.  We  have  men 
representing  chrome  and  manganese  to  the  extent  of  millions  of  dollars 
more  in  the  development  of  these  natural  resources. 

We  have  had  representatives  of  the  Department  of  the  Interior  and 
the  Tariff  Commission  show  us  how  thoroughly  they  appreciate  the 
problems  we  are  trying  to  work  out,  and  how  thoroughly  they  are  in 


THE  AMERICAN  MINING  CONGRESS  131 

accord  with  the  true  objects  we  are  trying  to  attain.  So,  if  this  meet- 
ing has  given  you  both  an  appreciation  of  the  delicate,  serious  nature 
of  this  problem  and  the  absolute  necessity  of  its  solution,  and  if  the  fact 
that  this  solution  is  not,  because  of  its  delicacies  and  intricacies,  impos- 
sible of  attaining,  though  great  strides  have  already  been  made  in  achiev- 
ing these  objects,  the  object  of  the  meeting  has  been  accomplished. 

We  need  not  for  a  moment  feel  that,  because  we  are  protecting  the 
interests  of  industries  in  which  we  personally  have  money  invested, 
we  are  following  out  a  purely  selfish  interest.  The  body  politic  is  made 
up  of  a  group  and  myriads  of  groups  of  selfish  interests,  all  of  them 
working  harmoniously  for  the  attainment  of  their  ends.  The  human 
body  is  made  up  of  myriads  of  selfish  organisms,  each  of  which  is  work- 
ing out  its  own  individual  salvation  and  its  own  individual  life. 

No  more  than  we  like  to  resort  to  the  desperate  efforts  of  a  pulmotor 
to  revive  life  in  a  human  body,  do  we  want  to  be  forced  to  a  pulmotor 
to  revive  life  in  the  body  politic  of  our  war  minerals. 

MR.  COSTIGAN:  May  I  say  that  if  the  motion  of  Mr.  Smith,  of  Ala- 
bama, is  to  be  put  to  this  Conference,  it  would  be  wise  to  eliminate  from 
it  the  reference  to  the  endorsement  of  the  Tariff  Commission?  The  Com- 
mission, as  such,  has  no  tariff  policies — it  investigates  and  reports  on 
facts ;  it  does  not  endorse  rate-making  tariff  legislation. 

MR.  H.  W.  SMITH :  Mr.  Chairman,  we  are  especially  grateful  to  Mr. 
Costigan  for  talking  to  us  this  afternoon.  We  must  feel  he  has  gone 
against  what  is  his  usual  procedure  in  his  warm  sympathy  and  interest 
in  our  efforts,  and  I  feel  the  resolution  suggested  by  Mr.  A.  E.  Smith  is 
covered  as  broadly  as  a  general  resolution  can  be,  which  is  to  be  endorsed 
by  a  general  resolution  that  was  covered  in  the  original  resolution  which 
was  presented.  I  will  read  that: 

WHEREAS,  The  dire  need  of  the  United  States  for  the  develop- 
ment of  minerals  essential  in  prosecution  of  war  was  made  most 
evident  during  the  world  war ;  and 

WHEREAS,  Under  the  stimulus  of  this  great  emergency  our 
resources  in  such  minerals  were  shown  to  be  sufficient ;  therefore, 
be  it 

Resolved,  That  The  American  Mining  Congress  support  legis- 
lation fostering  the  production  of  war  minerals,  that  the  United 
States  may  be  industrially  independent  both  in  times  of  peace 
and  in  times  of  war. 

Before  the  Chairman  adjourns  this  meeting  I  should  like  to  ask  if 
there  are  any  points  that  should  come  up  for  a  general  discussion  by  any 
of  the  gentlemen  representing  industries  which  have  not  been  heard 
from,  or  any  gentlemen  who  individually  have  anything  they  would  be 
willing  to  present  for  our  consideration. 

CHAIRMAN  BLAKE:  Gentlemen,  if  no  one  else  wishes  to  address 
the  Conference,  we  will  stand  adjourned. 


132  REPORT  OF  PROCEEDINGS 


ANNUAL  MEMBERS'  MEETING  AND  ELECTION 
OF  OFFICERS 

American  Mining  Congress 

The  members  of  The  American  Mining  Congress  assembled  at  8  o'clock 
Thursday  evening,  November  20,  in  the  Ordinary  of  the  Planters'  Hotel, 
President  Wells  in  the  chair. 

After  calling  the  meeting  to  order  the  President  requested  the  reading 
of  the  minutes  for  the  past  year.  These  minutes  were  read  by  Secretary 
Callbreath  and  were  adopted  by  unanimous  vote. 

Headquarters  in  Washington 

The  Secretary  mentioned  the  articles  of  incorporation  adopted  during 
the  year,  which  officially  changed  the  national  headquarters  of  The  Amer- 
ican Mining  Congress  from  Denver,  Colo.,  to  Washington,  D.  C.  Reading 
of  new  articles  of  incorporation  dispensed  with. 

The  Secretary  then  read  the  financial  statement,  which  was  accepted 
and  approved. 

Nominating  Committee 

The  following  Committee  on  Nomination  of  Directors  was  selected: 
Ross  Blake,  president  of  the  Arkansas  Manganese  Producers'  Associa- 
tion, Batesville,  Ark.;  Dr.  Henry  Mace  Payne,  The  Bertha  Coal  Company, 
New  York  City;  Victor  Rakowsky,  zinc  producer,  Joplin,  Mo. 

Secretary's  Report 

As  the  Committee  retired  to  consider  nominations  the  Secretary's  report 
was  called  for  and  was  read  by  Mr.  Callbreath  as  follows : 

Mr.  Chairman  and  Gentlemen :  To  outline  the  activities  of  the  organi- 
zation during  the  year  with  any  accuracy  would  require  too  much  time. 
At  the  meeting  last  year  it  was  decided  to  largely  increase  the  working 
force  of  the  organization.  The  plan  agreed  upon  was  to  request  contri- 
butions based  upon  10  cents  for  each  $1,000  of  production.  Upon  that 
basis,  as  the  reports  have  shown,  we  have  collected  during  the  year  a 
little  more  than  was  estimated  as  being  possible  during  the  first  year. 

The  plan  of  organization  then  agreed  upon  is  shown  upon  the  chart 
which  appears  in  the  November  issue  of  The  Mining  Congress  Journal. 
We  have  gone  a  long  way  toward  fulfilling  the  plan  which  was  then  out- 
lined, having  been  able  to  add  four  capable  assistants  to  our  executive 
staff  and  to  have  increased  the  office  force  sufficiently  to  look  after  the 
enlarged  work. 

War  Minerals  Relief 

There  are  two  things  which  stand  out  above  all  others  as  the  record 
of  the  year's  work.  One  of  these  is  the  work  looking  to  the  adoption  of 


THE  AMERICAN  MINING  CONGRESS  133 

a  War  Minerals  Relief  Bill  for  the  relief  of  those  men  who,  at  the  request 
of  the  Government  during  the  stress  of  war,  undertook  the  production  of 
minerals  necessary  to  war  purposes  under  the  promise,  as  they  believed, 
that  the  Government  would  maintain  prices  long  enough  to  amortize 
their  investment. 

Through  a  War  Minerals  Committee,  which  was  created  at  a  conference 
called  by  our  organization  in  the  city  of  Washington,  we  secured  the 
enactment  of  a  bill  which  most  everybody  would  have  said  was  an  utterly 
impossible  thing  to  do  when  the  work  was  undertaken. 

It  has  been  the  motto  of  The  American  Mining  Congress  that  if  a 
thing  is  right  and  there  is  need  of  it  being  done,  it  can  be  done.  While 
we  were  told  that  it  was  an  utter  impossibility  to  secure  relief  legislation ; 
that  Congress  was  absorbed  with  war  work,  and  that  this  was  a  matter 
that  related  only  to  small  transactions;  that  we  could  arouse  no  interest 
in  it,  the  fight  ended  in  the  passage  of  a  bill.  Great  credit  is  due  to 
those  gentlemen  who  came  to  Washington  and  helped  in  that  fight. 

It  is  unfortunately  true  that  no  matter  how  carefully  a  bill  is  prepared 
to  meet  requirements,  before  it  gets  through  the  various  committees  and 
the  halls  of  Congress  it  is  sometimes  so  disfigured  that  its  authors  are 
hardly  able  to  recognize  it.  In  consequence,  the  War  Minerals  Relief  Bill 
contained  numerous  technicalities,  making  equitable  adjustments  difficult. 

It  seems  that  we  have  yet  much  to  do  for  those  who  engaged  in  these 
hazardous  enterprises,  which  it  was  known  could  not  succeed  in  ordinary 
times,  but  which  were  necessary  to  help  the  nation  in  its  time  of  need. 

Large  Reserves  of  War  Minerals 

I  said  before  the  Senate  Mining  Committee,  when  the  first  War  Min- 
erals Bill  was  under  consideration,  that  I  believed  the  United  States 
possessed  within  its  borders  enough  mineral  resources — except  tin  and 
platinum — to  meet  every  industrial  requirement  of  this  nation.  One  gen- 
tleman said  he  thought  my  enthusiasm  had  gotten  the  better  of  my 
judgment,  because  the  United  States  Geological  Survey  had  estimated 
that  the  total  supply  of  manganese  ore  within  the  United  States  would 
all  be  consumed  in  from  three  to  five  years. 

Manganese  and  Magnesite 

It  has  been  developed  at  four  or  five  different  points  within  the  United 
States  that  individual  neighborhoods  possess  more  manganese  ore  than 
the  United  States  Geological  Survey  believed  existed  in  the  whole  nation. 
[Applause.]  It  was  said  we  had  no  magnesite  in  this  country.  We  had 
been  getting  that  which  is  used  for  the  steel  lining  of  furnaces  from 
Austria,  and  because  we  could  not  get  it  from  Austria  our  furnace  in- 
dustry was  about  to  be  paralyzed.  Our  prospectors  went  out  and  found 
enough  magnesite  to  supply  the  world,  and  a  supply  greater  than  was 
ever  thought  of. 

So  we  have,  through  the  war  and  through  the  burdens  of  losses  which 
have  come  upon  certain  of  our  citizens,  developed  resources  of  these 


134  REPORT  OF  PROCEEDINGS 

various  minerals  which  are  worth  more  than  hundreds  of  millions  of 
dollars  to  this  country.  Therefore,  out  of  the  crisis  of  the  war  we  have 
shown  that  this  country  may  be  made  industrially  independent  of  every 
other  nation  in  the  world.  [Applause.] 

We  are  still  hoping  that  through  our  War  Minerals  Division  we  may 
be  able  to  secure  an  amendment  to  the  War  Minerals  Bill  which  will  do 
absolute  justice  and  fairness  to  those  men  who,  through  patriotic  im- 
pulses, did  invest  money  and  now  carry  the  loss  of  investments  which 
have  developed  the  country's  resources. 

Taxation  of  Mines 

The  more  important  work  for  the  mining  industry  is  the  effort  we 
have  made  looking  to  the  equitable  taxation  of  mines  under  the  income 
and  war  profits  tax  laws.  It  seems  proper  that  the  history  of  this  move- 
ment be  recited  because  it  has  been  under  way  for  so  many  years,  and 
you  gentlemen  who  were  so  greatly  interested  knew  nothing  about  it. 

In  1909  the  first  income  tax  law  was  passed  by  the  Congress  of  the 
United  States.  It  made  no  reference  to  what  we  now  term  "depletion 
of  a  mining  property."  A  few  mining  companies  had  been  in  the  habit 
of  charging  off  each  year  the  depreciation  of  their  property  because  of 
the  exhaustion  of  the  mineral  bodies.  If  a  mine  is  worth  $100,000  and  it 
had  a  life  of  20  years,  at  the  end  of  each  year  they  deducted  $5,000, 
because  one-twentieth  of  the  mine's  value  would  have  been  exhausted. 

The  Internal  Revenue  Bureau  did  not  allow  this  deduction  and  suits 
were  brought  to  recover  that  difference.  The  courts  practically  decided 
that  a  mining  company  was  not  entitled  to  make  this  deduction  in 
figuring  its  net  income.  These  cases  were  pending  at  the  time  of  the 
passage  of  the  1913  law,  and  in  order  to  meet  that  situation  Congress, 
having  no  conception  of  the  character  of  the  wasting  industries,  put  in 
the  clause  that  limited  the  rate  of  depletion  to  5  per  cent,  of  the  gross 
value  of  the  output. 

Pointing  Out  Injustice 

At  that  time  The  American  Mining  Congress  believed  that  some  effort 
should  be  made  to  right  this  injustice.  At  that  time  there  was  no  expec- 
tation of  war,  and  we  did  not  anticipate  that  in  three  or  four  years  the 
income  tax  would  run  to  50  or  60  per  cent.,  but  even  the  then  2  or  4  per 
cent,  tax  was  so  unjust  in  principle  that  we  got  busy  to  right  that  in- 
justice. This  issue  was  presented  to  at  least  150  members  of  the  House 
and  Senate,  pointing  out  the  gross  injustice  of  that  law. 

Deductions  Allowed 

As  a  result  of  that  three-year  campaign — from  1913  to  1916 — Con- 
gress finally  was  awakened  to  the  inconsistency  of  that  law,  and  the 
1916  law  permitted  a  mine  in  figuring  its  net  income  to  first  deduct  the 
value  of  the  ore  in  the  ground.  At  that  time — except  as  a  matter  of  prin- 
ciple— this  was  not  of  such  great  importance,  because  it  was  only  2  or  4 


THE  AMERICAN  MINING  CONGRESS  135 

per  cent.,  but  immediately  after  that,  when  the  excess  war  profits  tax 
law  was  passed,  it  became  vastly  important. 

Conservative  Methods  Penalized 

The  administrative  provisions  of  the  1916  law  were  adopted  in  the 
1917  excess  profits  law,  but  even  with  the  allowance  for  depletion,  the 
1917  excess  profits  law  carried  many  inequities.  As  an  illustration,  the 
law  provided  that  no  property  could  be  valued  for  a  sum  greater  than 
the  face  value  of  the  capital  stock  taken  in  exchange  therefor,  so  that 
those  who  had  followed  the  advice  of  The  American  Mining  Congress 
with  conservative  capitalization  were  penalized  as  against  those  who 
had  an  inflated  capitalization.  An  illustration  frequently  used  in  arguing 
this  before  Congress  was  the  case  of  an  estate  in  which  a  valuable  min- 
ing property  was  left  to  heirs,  who  in  order  to  divide  it  properly  between 
the  members  organized  a  company  with  a  capitalization  of  $10,000  and 
divided  the  capital  stock  among  the  members  of  the  family. 

During  the  year  1916  that  property  had  paid  an  estate  tax  on  the 
basis  of  a  valuation  of  $2,800,000,  while  it  was  represented  by  $10,000 
in  capital  stock.  The  1917  law  provided  that  a  company  might  deduct 
from  its  gross  income  from  7  to  9  per  cent,  of  its  capital;  whether  it 
earned  7  per  cent,  or  not  in  the  pre-war  period  it  was  entitled  to  deduct 
7  per  cent.,  and  no  matter  how  great  the  earning  the  deduction  was 
limited  to  9  per  cent. 

Under  that  provision  this  company  was  forced  to  pay  a  tax — which  it 
ought  not  to  have  paid — of  from  7  to  9  per  cent,  on  the  difference  be- 
tween $10,000,  its  corporate  capitalization,  and  $2,800,000. 

After  the  enactment  of  this  law  the  Commissioner  of  Internal  Reve- 
nue, realizing  the  intricate  difficulties  of  the  law,  appointed  a  Tax 
Advisory  Board,  with  Dr.  T.  C.  Adams  as  its  head.  Hearings  were  given 
until  November  20,  when  hearings  were  closed  and  notice  given  that 
further  statements  must  be  filed  in  writing.  From  the  hearings  it  was 
evident  that  the  Advisory  Board  had  no  conception  of  the  peculiar  char- 
acter of  the  wasting  industries,  and  we  found  it  impossible  to  get  further 
hearings. 

Treasury  Department  Co-operated 

We  sent  out  a  call  for  those  interested  to  come  to  Washington.  A 
delegation  of  42  men  from  at  least  40  States  in  the  Union  was  assembled, 
and  our  plea  was  presented  to  the  chairman  of  the  Senate  Finance  Com- 
mittee. 

He  immediately  took  the  matter  up  with  the  Treasury  Department. 
We  had  a  hearing  the  next  day  before  the  full  Tax  Advisory  Board,  and 
that  evening  a  select  committee  representing  the  Advisory  Board,  with 
Mr.  T.  C.  Adams  as  chairman,  met  with  a  sub-committee  of  our  organ- 
ization in  our  office,  and  from  that  time  on  our  committee  worked  in 
harmony  with  the  Treasury  Department  in  working  out  the  regulations 
which  made  possible  the  administration  of  the  1917  law  in  such  a  way 
as  not  to  crush  the  mining  industry. 


136  REPORT  OF  PROCEEDINGS 

Mining  Congress  Protected  Wasting  Industries 

Following  that  was  the  1918  law.  We  went  before  the  House  Ways 
and  Means  Committee  and  asked  them  to  legalize  the  1917  regulations 
by  making  them  a  part  of  the  law.  After  this  had  been  approved  we 
went  to  the  Senate  Finance  Committee  with  eight  specific  amendments 
which  we  asked  them  to  make  a  part  of  the  law.  Of  those  eight  amend- 
ments seven  are  in  the  bill  substantially  as  proposed. 

The  mining  industry  at  all  times  has  been  willing  and  ready  to  pay  its 
full  share  as  compared  with  any  other  line  of  business,  but  what  we 
asked  was  that  it  should  not  be  required  to  pay  an  unjust  proportion. 

At  the  end  of  the  year  1918  the  Internal  Revenue  Bureau  was  simply 
swamped  with  cases.  The  Bureau  was  overloaded  with  cases  years  back, 
and  Commissioner  Roper  saw  that  it  was  absolutely  essential  that  some 
better  system  should  be  devised  by  which  the  work  of  the  office  could 
be  expedited. 

Mr.  Roper  called  in  a  very  eminent  accountant  to  reorganize  his 
Bureau.  We  knew  that  under  this  re-arrangement  all  kinds  of  tax  cases 
would  go  into  the  same  hopper  and  there  would  be  no  distinction  made 
and  no  consideration  given  to  the  peculiar  character  of  the  wasting 
industries. 

We  felt,  therefore,  that  somebody  in  that  department  who  understood 
the  peculiar  character  of  the  mining  industry  should  be  put  in  position 
that  its  cases  should  be  referred  to  him,  and  not  to  a  man  who  knew 
nothing  about  a  mine  and  whom  it  would  take  years  to  so  educate  that 
he  might  determine  its  claims  intelligently. 

Asked  for  Wasting  Industries  Unit 

After  several  conferences  we  called  upon  Mr.  Roper  with  a  delegation 
of  17.  We  offered  the  services  of  the  five  great  branches  of  the  wasting 
industries  and  asked  him  to  listen  to  Rush  C.  Butler,  of  Chicago,  repre- 
senting the  coal-mining  industry;  to  Judge  John  C.  Barnett,  of  Colorado, 
representing  oil;  to  Judge  A.  Scott  Thompson,  of  Oklahoma,  represent- 
ing zinc  and  lead;  to  Judge  S.  C.  Boyle,  of  Kansas  City,  representing  lum- 
ber; and  to  Paul  Armitage,  of  New  York,  representing  copper. 

"What  we  want  you  to  do,  Mr.  Commissioner,  is  to  provide  in  your 
Bureau  a  wasting  industries  unit  with  a  man  at  the  head  of  each  who 
is  familiar  with  its  special  problems,  to  whom  these  questions  may  be 
referred."  After  the  case  was  presented  Mr.  Roper  approved  our  plan 
and  expressed  his  readiness  to  do  the  things  we  asked  him.  "But, 
gentlemen,"  he  said,  "I  want  you  to  remember  that  the  character  of  men 
you  want  me  to  employ  are  men  receiving  $25,000  a  year.  I  have  only 
$5,000  to  pay  them,  but  if  you  will  find  the  men  I  will  appoint  them 
in  the  Revenue  Bureau." 

I  want  to  give  you  the  names  of  the  men  who  were  appointed:  Repre- 
senting oil,  J.  L.  Darnell;  representing  copper,  L.  C.  Graten;  represent- 
ing lumber,  David  T.  Mason;  representing  iron,  E.  C.  Harder;  repre- 
senting zinc,  C.  E.  Seibenthall.  The  coal  man,  I  am  isorry  to  say,  has 
not  yet  been  selected. 


THE  AMERICAN  MINING  CONGRESS  137 

I  feel,  gentlemen,  that  this  brief  history  is  of  interest  to  all' of  you, 
and  one  of  which  The  American  Mining  Congress  may  well  be  proud. 
I  feel  our  standing  with  the  Internal  Revenue  Bureau  is  such  that 
if  there  is  an  injustice  done  to  any  of  our  people,  we  can  get  an  abso- 
lutely impartial  hearing,  and  that  if  there  is  anything  that  can  be  done 
under  the  law  to  bring  justice  to  the  one  who  has  been  imposed  upon, 
justice  will  be  done. 

We  all  know  that  under  present  conditions  taxes  must  be  high  and 
somebody  must  pay  them,  and  all  we  have  asked  for  the  mining  industry 
is  that  it  shall  pay  only  its  just  share.  [Applause.] 

Enlarging  Executive  Staff 

There  are  many  other  activities  in  which  we  were  engaged.  Our 
income  during  the  past  year  has  enabled  us  to  add  to  our  office  force 
four  high-grade,  capable  men,  each  fitted  to  do  a  certain  kind  of  work 
and  each  successfully  doing  that  work.  We  want  still  further  to  enlarge 
our  organization. 

One  of  the  grave  problems  which  affect  mining  men  everywhere  is 
the  question  of  freight  rates.  There  have  been  individual  efforts  to 
investigate  local  freight  problems  in  various  parts  of  the  country,  but 
there  has  never  been  any  comprehensive  effort  to  figure  exactly  what 
the  mining  industries  should  pay  for  transportation.  We  do  know  that 
other  lines  of  industry  have  gone  to  the  bottom  of  this,  and  we  know 
that  the  mining  industries  have  never  made  any  comprehensive  investi- 
gation. It  may  be  the  rate  you  are  paying  is  fair,  but  I  believe  there 
should  be  a  comprehensive  effort  to  see  that  freight  rates  are  equitably 
applied.  The  mining  industry  furnishes  58  per  cent,  of  the  tonnage 
handled  by  the  railroads,  and  should  know  whether  or  not  its  payments 
are  equitably  assessed. 

I  believe  we  should  have  in  our  organization  a  high-grade  freight  man. 
I  do  not  mean  a  radical,  but  a  conservative  business  man  who  under- 
stands the  transportation  problem  and  will  come  into  your  neighborhood 
and  tell  you  whether  you  are  paying  too  much  or  too  little,  and  see  that 
effort  is  made  through  the  Interstate  Commerce  Commission  or  else- 
where to  right  every  unjust  situation. 

I  believe,  right  now,  also,  if  we  were  able  to  have  a  high-grade  man 
devoting  his  whole  time  to  internal  revenue  taxes  it  would  help  mate- 
rially, and  I  hope  we  may  have.  Of  course,  that  may  be  work  that 
would  require  but  a  year  or  two,  but  many  of  you  have  a  problem  in 
Washington  and  you  are  obliged  to  take  your  force  down  to  Washington 
and  spend  a  week  to  present  it,  which  we  might  do  for  you  in  20  minutes. 

We  have  tried  to  meet  promptly  every  request  made  upon  us.  Now 
that  our  organization  is  enlarged,  I  think  we  can  say  that  hereafter 
we  can  meet  every  requirement  in  Washington  which  can  be  accomplished 
by  such  an  organization. 

We  want  you  to  understand  that  The  American  Mining  Congress  is 
ready  to  take  up  any  battle  which  has  justice  as  its  basis;  that  we  are 


138  REPORT  OF  PROCEEDINGS 

ready  to  fight  to  the  finish  upon  it.  Your  Resolutions  Committee  has 
heretofore  been  so  conservative  and  fair  that  it  has  not  put  problems 
to  us  that  we  could  not  handle. 

I  want  you  to  feel  that  we  are  on  the  job.  We  are  watching,  as  care- 
fully as  we  may,  to  prevent  everything  which  might  be  bad  for  the  min- 
ing industry.  We  are  watching  out  to  secure  those  things  which  are 
good  for  the  mining  industry,  and  we  want  you  to  feel  that  we  are  doing 
our  "dead  level  best"  to  serve  you.  When  you  come  to  Washington  the 
Mining  Congress  office  is  yours,  and,  fortunately,  now  we  will  be  equipped 
with  facilities  by  which  we  can  give  you  that  assistance  without  inter- 
fering with  the  work  of  our  office  force. 

I  cannot  but  feel  a  pride  in  the  success  that  has  been  made  by  the 
organization. 

I  thank  you  for  your  hearty  support  in  the  past,  and  if  I  remain  your 
Secretary  I  hope  you  will  continue  to  help  me,  and  I  promise  you  that 
the  best  there  is  in  me  will  be  given  to  the  organization.  I  want  to  say 
that  those  associated  with  me  are  as  faithful  to  your  interests  as  I  am. 
To  illustrate:  One  of  our  office  assistants  made  the  remark  that  he  was 
glad  to  get  back  to  Washington  because  he  never  knew  before  that  a  man 
could  do  the  thing  he  liked  to  do  better  than  anything  else  and  get  paid 
for  it.  [Laughter.]  That  is  the  spirit  of  The  American  Mining  Congress, 
and,  therefore,  we  are  doing  the  things  we  like  to  do,  and  we  like  to 
serve  you.  I  thank  you.  [Applause.] 

(At  the  close  of  the  reading  of  the  report  Mr.  Callbreath  was  given 
rising  applause  and  three  cheers  for  his  excellent  work.) 

The  Mining  Congress  Journal 

DR.  PAYNE :  Mr.  President,  the  Committee  on  Nominations  is  ready 
to  report,  but  while  I  am  on  my  feet  and  before  the  report  is  given,  I 
would  like  to  speak  apropos  of  Mr.  Callbreath's  mention  of  The  Mining 
Congress  Journal.  I  have  no  axe  to  grind  and  hold  no  brief  for  The 
Mining  Congress  Journal,  but  I  want  to  quote  something  which  happens 
certainly  every  week  and  frequently  every  day  in  my  own  office.  I  am 
told  by  others  that  it  also  happens  in  their  offices,  and  I  think  we  should 
take  this  idea  home  with  us. 

Mr.  Callbreath  has  told  you  that  the  advertisers  in  The  Mining  Con- 
gress Journal  need  our  support.  I  think  we  are  all  supporting  them, 
but  here  is  a  situation  that  arises:  Different  from  the  so-called  trade 
journals  and  the  various  other  engineering  and  professional  papers  of 
mining,  The  Mining  Congress  Journal  goes  usually  to  the  chief  executive 
of  your  company  and  mine.  We  happen  to  be  that  executive;  it  comes 
on  that  desk  and  the  Journal  stays  there.  Now,  this  is  a  typical  illustra- 
tion of  what  happens: 

The  president  of  my  company  and  myself  happen  to  be  in  conference, 
possibly  the  directors  are  in  conference,  we  are  discussing  the  equipment 
of  some  of  our  property,  and  we  have  that  Journal  on  the  desk.  Probably 
at  this  meeting  we  are  discussing  some  recent  mining  legislation  and 
we  turn  to  The  Mining  Congress  Journal — which  you  know  is  an  encyclo- 


THE  AMERICAN  MINING  CONGRESS  139 

pedia  of  reference.  Personally,  I  have  two  copies,  one  for  use  in  the 
office,  where  it  is  usually  pretty  well  thumb-marked,  and  one  to  keep. 

Now,  then,  we  recommend  some  particular  equipment.  The  president 
pushes  the  button;  the  purchasing  agent  comes  in  and  he  says:  "Jones, 
or  Smith,  we  have  decided  to  look  into  the  equipment  manufactured  by 
so-and-so.  You  write  these  people."  'The  purchasing  agent  does  it; 
the  advertiser  gets  the  benefit,  but  he  does  not  know  that  it  was  his 
advertisement  in  the  Journal  that  brought  it  about.  Now,  every  man 
who  advertises  is  entitled  to  a  run  for  his  money,  and  I  have  learned 
that  a  number  of  advertisers  have  claimed  that  they  did  not  get  any 
results. 

I  am  calling  this  to  your  attention  because  that  has  happened  in  my 
office  time  and  time  again,  sometimes  a  number  of  times  a  week.  People 
call  up  and  say :  "Payne,  you  have  a  number  of  Mining  Congress  Journals, 
look  up  and  see  Number  —  Bill  so-and-so." 

I  want  to  call  this  to  the  attention  of  you  gentlemen,  because  we  owe 
it  to  our  advertisers,  and,  in  my  particular  case,  I  invariably  see  that 
the  purchasing  agent  makes  mention  of  the  fact  that  we  saw  the  advertise- 
ment in  the  Journal. 

Mr.  President,  having  completed  that,  may  I  proceed  with  the  report 
of  the  Nominating  Committee?  . 

(Consent  given.) 

DR.  PAYNE :  Your  committee,  having  in  view  the  widest  possible 
representation,  not  only  geographically  but  from  other  standpoints,  makes 
the  following  announcement  of  the  nominees  for  the  office  of  directors: 
Dr.  R.  C.  Allen,  Col.  D.  B.  Wentz,  Thomas  T.  Brewster  and  John  C. 
Howard. 

(The  nominees  were  elected  by  unanimous  ballot,  cast  by  Secretary 
Callbreath.) 

Telegram  from  Director  Kemmerer 

PRESIDENT  WELLS:  We  have  a  telegram  here  from  Director  M. 
C.  Kemmerer,  of  New  York,  reading:  "Regret  inability  to  attend  Con- 
gress at  last  moment.  Please  give  the  directors  and  friends  a  dinner 
at  my  expense."  [Applause.] 

(Mr.  John  Roche,  director  of  mines  of  the  State  of  New  Jersey,  was 
introduced  to  the  meeting  by  President  Wells. 

Statement  by  President  Wells 

PRESIDENT  WELLS:  Gentlemen,  I  feel  we  have  cause  to  congratu- 
late ourselves  on  the  development,  progress  and  results  accomplished  by 
our  organization  during  the  past  year.  Your  reception  to  Mr.  Call- 
breath  has  rightly  indicated  your  realization  of  the  tribute  that  is  due 
him  for  these  results. 

We  have  realized  our  financial  program  as  it  was  established  in 
December  last,  and  have  done  so,  I  feel,  without  forfeiting  the  friend- 
ship of  too  many  of  our  friends.  Many  of  the  larger  mine  operators, 


140  REPORT  OF  PROCEEDINGS 

men  in  the  mining  industry,  and  officials  of  corporations  have  come  to 
correctly  realize  the  necessity  of  The  American  Mining  Congress  and  the 
value  of  its  work. 

I,  therefore,  am  confident  that  we  shall  experience  no  difficulty  in  the 
coming  year,  not  only  in  maintaining  the  budget  that  comes  over  from 
last  year,  but  in  enlarging  it  quite  materially  so  that  our  work  may  go 
forward  steadily  and  soundly. 

I  want  to  tell  you  that  this  evening  I  was  privileged  to  represent  you 
at  the  monthly  meeting  and  dinner  of  the  St.  Louis  Association  of  Credit 
Men.  I  assumed  to  take  to  them  your  greetings  and  to  explain  to  them 
what  The  American  Mining  Congress  meant,  what  we  intend  to  have 
it  mean — something  of  its  history.  I  particularly  tried  to  convey  to 
them  our  determination  at  this  time  to  study  the  industrial  problems  of 
this  country,  to  endeavor  to  develop  a  solution  for  them,  methods  that 
would  be  effective,  and  then  to  give  our  best  efforts  to  seeing  that  those 
methods  are  applied. 

The  response,  I  am  sure,  would  have  been  to  you,  as  it  was  to  me,  most 
gratifying  and  most  distinctly  heartening.  They  all  stood  upon  their 
feet  and  applauded  and  cheered,  and  gave  every  evidence  of  their  intention 
to  join  us  in  the  sort  of  work  that  we  all  know  we  have  to  do. 

MR.  A.  J.  EDWARDS  (Chicago) :  Mr.  President,  if  I  do  not  interfere 
with  the  regular  order  of  business,  it  seems  to  me  that  a  rising  vote  of 
thanks  should  be  extended  to  the  President,  Secretary  and  other  officials 
for  their  efficient,  active  and  persistent  service  during  the  past  year. 

(Motion  duly  seconded  by  several  delegates.) 

PRESIDENT  WELLS:  You  have  heard  the  motion;  perhaps  some 
one  will  be  good  enough  to  put  it. 

MR.  EDWARDS:  All  those  in  favor  of  the  motion  will  signify  bjr 
saying  "Aye";  contrary,  "No." 

(Motion  unanimously  carried  by  rising  vote  of  thanks.) 

PRESIDENT  WELLS:     Thank  you,  gentlemen. 

Secretary  Callbreath  spoke  of  the  splendid  work  and  co-operation  in 
the  development  of  The  Mining  Congress  on  the  part  of  President  Wells. 

Campaign  for  Membership 

Assistant  Secretary  Burns  appealed  to  the  members  of  the  organization 
present  to  participate  in  the  enlargement  of  membership  and  the  strength- 
ening of  organization  work  in  behalf  of  the  mining  industry. 

MR.  EDWARDS:  Mr.  Burns'  statement  a  few  minutes  ago  as  to  the 
advisability  of  securing  members,  etc.,  prompted  me  to  suggest  that  the 
Secretary  send  to  each  member  a  number  of  application  blanks.  Several 
times  I  have  talked  with  men  about  joining  the  Congress  and  have  advised 
them  to  write  down  and  send  in  an  application.  They  have  asked  me 
if  I  had  the  form,  and  I  did  not  have  one.  I  think  if  I  had  a  few  on 
my  desk  I  could  send  in  a  few  applications,  and  once  in  a  while  accompa- 
nied by  a  check. 


THE  AMERICAN  MINING  CONGRESS  141 

Furthermore,  I  am  reminded  that  while  I  was  not  here  at  the  begin- 
ning of  this  meeting,  since  I  arrived  in  St.  Louis  I  have  received  informa- 
tion which  leads  me  to  believe  that  the  comfort,  and  happiness,  and  suc- 
cess, and  efficiency  of  this  meeting  are  due  to  the  faithful  and  efficient 
service  of  Mr.  Burns  since  he  has  been  located  here.  Therefore,  I  move 
we  extend  him  a  rising  vote  of  thanks  and  appreciation. 

(Rising  vote  of  thanks  extended  Assistant  Secretary  Burns.) 

Thanks  to  St.  Louis  Committee 

MR.  MATHE WSON :  There  is  one  other  body  that  deserves  the  thanks 
of  this  organization,  and  that  is  the  St.  Louis  Committee;  for  if  any  con- 
vention ever  was  entertained  in  a  royal  manner,  it  is  this  Convention. 

After  several  members  present  had  commended  the  unusual,  excellent 
arrangements  and  the  hospitality  received  in  St.  Louis,  the  meeting 
adjourned  sine  die. 


142  REPORT  OF  PROCEEDINGS 


FINAL  GENERAL  SESSION 

American  Mining  Congress 
FRIDAY  AFTERNOON,  NOVEMBER  21,  1919 

The  meeting  convened  at  2.15  P.  M.  in  Exposition  Hall,  President 
Bulkeley  Wells  presiding. 

CHAIRMAN  WELLS:  The  Convention  will  now  be  in  order.  We 
will  stand  and  sing  the  first  verse  of  "America." 

(The  Convention  arose  and  sang  the  first  verse  of  "America.") 

Law  and  Order 

CHAIRMAN  WELLS :  Ladies  and  Gentlemen  of  the  Convention :  We 
have  had  much  discussion  of  the  industrial  situation  and  of  the  problems 
that  confront  us,  but  we  have  not  had  too  much.  Yet  it  is  fortunate 
that  this  afternoon  we  are  to  have,  as  it  were,  a  final  and  forceful  word 
of  summary  from  one  who  has  proven  his  right  and  his  courage  to  speak. 

At  personal  inconvenience,  Hon.  A.  H.  Roberts,  Governor  of  Tennessee, 
has  absented  himself  from  the  duty  of  his  State,  and  has  come  here 
simply  for  today  and  simply  to  address  this  Convention.  In  Massa- 
chusetts the  industrial  crisis  was  forced  upon  an  unknowing  people, 
but  under  the  leadership  of  Governor  Roberts  the  people  of  Ten- 
nessee are  determined  that  no  crisis  shall  arise.  He  knows  whereof  he 
speaks  and  he  dares  to  speak  it.  Governor  Roberts  will  now  speak  to 
you  on  the  aspects  of  the  law  and  order  situation.  I  have  great  honor 
in  presenting  to  you  Governor  Roberts,  of  Tennessee. 

(As  Governor  Roberts  arose  to  speak  he  was  greeted  with  cheers, 
the  audience  standing.  His  address  will  appear  on  page  751.) 

Greetings  from  Arkansas 

At  the  close  of  the  address  by  Governor  Roberts,  Assistant  Secretary 
Burns  read  the  following  letter  received  from  the  Governor  of  Arkansas : 

EXECUTIVE   CHAMBER 

STATE  OF  ARKANSAS 

LITTLE  ROCK 

November  17,  1919. 
American  Mining  Congress,  Planters'  Hotel,  St.  Louis,  Mo.: 

GENTLEMEN — I  greatly  regret  my  inability  to  meet  with  you 
in  convention  because  of  the  great  and  important  matters  which 
are  to  be  considered  by  you.  The  banquet  should  be  the  climax 
of  this  very  important  meeting  which  deals  with  the  question  of 
employers  and  labor. 

Personally,  I  am  in  hearty  sympathy  with  the  plan  outlined 
by  President  Wilson,  and  feel  that  a  readjustment  of  conditions 


THE  AMERICAN  MINING  CONGRESS  143: 

existing  at  the  present  time  between  capital  and  labor  should 
be  made.  At  the  same  time,  I  wish  to  very  respectfully  call 
the  attention  of  you  gentlemen,  who  are  assembled  for  the 
purpose  of  outlining  a  program  which  will  deal  fairly  with 
both  capital  and  labor,  that  there  is  another  class  of  citizens 
which  should  not  be  overlooked  in  this  readjustment,  and  that  is 
the  class  which  does  not  belong  to  either  capital  or  labor.  I 
respectfully  suggest  that  your  program  for  the  readjustment  of 
conditions  existing  between  capital  and  labor  will  avail  little, 
unless  it  is  based  on  the  principles  of  democracy,  Americanism 
and  patriotic  service  to  our  country.  I  have  no  well-defined 
plan  of  procedure  to  impose  upon  you  gentlemen  at  this  time,, 
other  than  the  fact  that  every  man  must  recognize  and  appreciate 
the  rights  of  every  other  man,  whether  it  be  capital  or  whether 
it  be  labor.  I  believe  that  the  safe,  sane  thinkers  of  organized 
labor  and  of  the  so-called  capitalists  should  be  able  to  get  to- 
gether and  work  together  for  their  common  good  and  without  any 
serious  consequences  to  that  class  of  citizens  who  do  not  belong 
to  either  capital  or  labor. 

Trusting  that  your  deliberations  will  be  safe  and  sane,  as  I  am 
sure  they  will  be,  and  that  great  good  may  come  from  this  Con- 
vention, I  am, 

Yours  very  respectfully, 

(Signed)      CHARLES  H.  BROUGH, 

Governor* 

Executive  Session 

CHAIRMAN  WELLS:  An  executive  session  of  this  Convention  will 
now  be  held.  All  members  of  The  American  Mining  Congress  and  dele- 
gates to  this  Convention  are  entitled  to  attend;  all  others  will  please 
withdraw. 

(Executive  Session  convened.) 

Invitations  to  Convention 

CHAIRMAN  WELLS:  Are  the  gentlemen  present  who  desire  to 
address  this  Convention  in  regard  to  its  next  annual  meeting  place? 
According  to  the  printed  program,  their  appearance  would  follow  the 
report  of  the  Resolutions  Committee,  but  it  was  thought  that  if  they  were 
present  we  would  be  glad  to  preceed  at  this  time. 

MR.  KURD:  The  Minnesota  delegation,  Minneapolis  especially,  the 
Lake  Superior  District  as  a  whole,  has  a  very  great  desire  that  you  will 
consider  Minneapolis  for  the  next  meeting.  We  shall  expect  to  place 
before  the  Executive  Committee  the  proper  information  that  will  lead 
them  to  make  their  decision  quickly.  We  cannot  just  at  this  moment 
make  such  a  statement,  but  upon  return  to  Minneapolis  we  hope  to  do  so. 

Minneapolis  can  entertain  you  royally,  and  we  hope  you  will  come~ 
We  are  a  good-looking  city;  many  of  you  know  where  we  are  and  all 
about  it.  We  hope  that  invitation  can  be  made  in  the  near  future  and 
satisfactorily  to  the  Executives  and  to  the  Convention.  [Applause.] 

CHAIRMAN  WELLS:  Thank  you,  Mr.  Kurd.  Are  there  others  who 
desire  to  be  heard  on  this  subject?  (No  response.)  I  know  there  are 
others,  but  they  are  not  present;  so  we  will  proceed  with  the  next  order 
of  business,  which  is  the  final  report  of  the  Committee  on  Resolutions. 


144  REPORT  OF  PROCEEDINGS 

Resolutions 

Before  the  reading  of  that  report  is  undertaken,  I  should  like  to  have 
your  views  as  to  how  you  will  deal  with  the  various  resolutions  as  they 
are  read  in  that  report.  Will  you  have  debate  upon  them  as  the  reso- 
lution is  read  and  comes  before  the  Convention,  or  will  you  await  the 
complete  reading  of  the  full  report? 

SENATOR  VOORHEIS:  Mr.  Chairman,  I  move  that  we  wait  until 
the  entire  report  is  read.  If  there  are  no  objections  to  the  resolutions, 
they  can  be  passed  in  a  body. 

(Motion  duly  seconded,  put  and  carried.) 

Chairman  Nye,  of  the  Resolutions  Committee,  read,  and  upon  motion 
of  Mr.  Mackenzie,  of  Utah,  the  Convention  considered  and  adopted,  the 
various  resolutions  upon  which  there  was  no  debate,  as  follows: 

WHEREAS,  The  success  of  the  Twenty-second  Annual  Convention  of  The 
American  Mining  Congress  is  largely  due  to  the  splendid  provision  made 
for  the  convenient  transaction  of  the  Convention's  business  and  to  the 
generous  hospitality  of  the  people  of  the  State  of  Missouri  and  the  City 
of  St.  Louis;  and 

WHEREAS,  This  Convention  desires  to  make  permanent  record  of  its 
obligation  to  the  Convention  City  and  State,  and  to  all  organizations  and 
individuals  that  have  contributed  to  make  our  visit  agreeable  and  profit- 
able; therefore,  be  it 

Expressions  of  Thanks 

Resolved  by  the  Twenty-second  Annual  Convention  of  The  American 
Mining  Congress,  That  the  sincere  thanks  of  the  Convention  be  extended 
to  the  people  of  the  State  of  Missouri  and  of  the  City  of  St.  Louis,  Gov- 
ernor Frederick  D.  Gardner,  Mayor  Henry  W.  Kiel,  the  Advertising  Club 
of  St.  Louis,  the  Associated  Industries  of  Missouri,  the  Associated  Re- 
tailers, the  Junior  Chamber  of  Commerce,  the  Kiwanis  Club,  the  Opti- 
mists' Club,  the  Press  of  St.  Louis,  the  Rotary  Club,  the  St.  Louis  Con- 
vention and  Publicity  Bureau  as  represented  in  the  membership  of  the  St. 
Louis  General  Committee,  the  St.  Louis  Chamber  of  Commerce,  the  St. 
Louis  Ladies'  Reception  Committee;  and  be  it  further 

Resolved,  That  this  Convention  record  its  especial  appreciation  of  the 
services  performed  by  the  various  local  committees  in  charge  of  the 
Convention  arrangements,  noting  with  approval  that  these  committees 
recognized  the  serious  purposes  of  the  Convention  by  providing  a  full 
measure  of  hospitality  and  entertainment  without  unduly  distracting  the 
attention  of  the  members  and  delegates  from  their  important  delibera- 
tions, and  that  the  thanks  of  the  Convention  be  extended  to  all  of  the 
said  committees  and  all  the  members  thereof; 

Resolved,  That  the  thanks  of  the  Convention  be  extended  to  the  emi- 
nent speakers  who  have  addressed  it,  to  the  officers  of  the  Convention 
and  of  its  various  sections,  and  to  the  able  Secretary  of  the  Conerress 
and  the  capable  members  of  his  staff,  to  whose  unselfish,  untiring  and 
efficient  efforts,  before  and  during  the  Convention,  are  so  largely  due  the 


THE  AMERICAN  MINING  CONGRESS  145 

success  of  the  Convention  and  the  comfort  and  pleasure  enjoyed  by  all 
who  attended  it; 

Resolved,  That  the  thanks  of  the  Convention  be  extended  to  the 
officers,  directors  and  standing  committees  of  the  Congress  for  their 
valuable  services  in  the  past  year  to  the  organization,  the  mining  industry, 
and  the  national  welfare. 

Recognition  of  Service  of  Secretary  Callbreath 

Resolved,  That  we,  delegates  of  the  Twenty-second  Annual  Convention 
of  The  American  Mining  Congress,  at  St.  Louis,  Mo.,  November  17-21, 
1919,  representing  every  phase  of  the  mining  and  oil  industries,  and  em- 
bracing representatives  from  every  mining  State  in  the  Union  and  the 
Territory  of  Alaska,  tender  to  James  F.  Callbreath,  Secretary  of  the 
organization  for  15  years,  their  deep  and  sincere  appreciation  of  the 
tireless  energy  and  unbounded  loyalty  with  which  he  has  handled  the 
onerous  duties  of  his  office. 

By  his  initiative,  diplomacy  and  foresight  he  has  aided  immeasurably 
in  lessening  the  legislative  burdens  of  the  industry  and  has  warded  off 
oppression  that  might  have  resulted  from  ignorance  of  true  conditions 
in  high  place. 

While  we  also  recognize,  appreciate  and  commend  the  efficiency  of  his 
staff,  we  feel  that  Mr.  Callbreath's  long  service  of  undivided  loyalty  and 
great  accomplishment  entitle  him  to  special  public  expression  of  thanks 
from  every  man  connected,  directly  or  indirectly,  with  the  mining  industry 
of  the  United  States. 

Demanding  Equality  Abroad 

WHEREAS,  American  nationals  do  not  enjoy  the  same  privileges  in  the 
acquisition  of  mines  and  minerals,  including  petroleum,  in  certain  for- 
eign countries  and  their  possessions,  as  are  enjoyed  by  the  nationals  of 
those  countries  in  the  United  States;  now,  therefore,  be  it 

Resolved,  That  it  is  the  sense  of  this  Congress  that  in  the  event  of 
failure  of  efforts  by  the  State  Department  to  effect  complete  reciprocity 
in  respect  to  the  acquisition  and  holding  of  mines  and  minerals,  including 
petroleum,  then  so  long  as  such  discrimination  exists,  the  nationals  of 
such  countries  should  be  prohibited  from  holding  in  the  United  States 
and  its  possessions  rights  similar  to  those  withheld  from  citizens  of  the 
United  States  in  such  countries. 

Requesting  Additional  Experiment  Stations 

WHEREAS,  The  Congress  of  the  United  States  has  authorized  ten  min- 
ing experiment  stations;  and 

WHEREAS,  Four  of  these  ten  remain  to  be  established;  now,  therefore, 
be  it 

Resolved,  That  the  Congress  of  the  United  States  be  urged  to  pro- 
vide immediately  the  necessary  appropriations  for  the  establishment 
and  operation  by  the  United  States  Bureau  of  Mines  of  these  four  experi- 
ment stations. 


146  REPORT  OF  PROCEEDINGS 

Oil  Shale  Development 

WHEREAS,  The  oil  shales  of  the  Western  States  contain  an  abundant 
supply  of  oil  and  kindred  products,  locked  up  in  such  shales,  more  than 
sufficient  to  take  the  place  of  the  rapidly  diminishing  supply  of  crude 
petroleum;  and 

WHEREAS,  Most  of  such  shales  are  located  on  the  public  domain  and  a 
means  of  stabilizing  the  right  of  possession  in  private  parties  sufficient 
to  insure  an  adequate  return  to  capital  invested  in  development  is  essen- 
tial; and 

WHEREAS,  The  immediate  development  of  a  practical  and  efficient 
method  of  education,  by  a  process  free  to  all,  can  only  be  accomplished 
under  Government  control  and  directions;  now,  therefore,  be  it 

Resolved,  1.  That  in  the  absence  of  legislation  permitting  acquisition  of 
fee  title  to  oil  shale  lands,  we  favor  the  immediate  adoption  of  Senate  Bill 
2775,  known  as  the  General  Leasing  Bill,  as  amended  by  the  House,  as 
calculated  to  furnish  the  best  obtainable  assurance  of  title  and  right  to 
possession  so  essential  to  the  investment  of  private  capital  in  a  new 
industry;  and, 

2.  That  we  strongly  urge  the  adoption  of  Senate  Bill  2617,  by  Senator 
Henderson,  authorizing  the  Bureau  of  Mines  to  make  experiments  and 
investigations  to  determine  the  commercial  and  economic   practicability 
of  the  utilization  of  oil  shale  as  a  commercial  product  and  appropriating 
$140,000  in  aid  thereof;  and, 

3.  That  the  Secretary  of  The  American  Mining  Congress  be  and  he 
is  hereby  authorized  and  directed  to  communicate  these  resolutions  to 
Senate  and  House  Committees  having  these  measures  in  charge,  and  to 
use  every  legitimate  effort  to  secure  their  early  passage  and  approval. 

To  Prohibit  Destruction  of  Coins 

WHEREAS,  The  present  laws  prohibiting  the  mutilation  of  coin  seem  to 
be  insufficient  to  protect  such  coin  from  total  destruction;  and, 

WHEREAS,  Such  a  protection  should  be  afforded  by  proper  laws;  there- 
fore, be  it 

Resolved,  That  The  American  Mining  Congress  favors  the  enactment 
of  such  a  law  and  requests  the  Secretary  of  the  Congress  to  use  his  good 
offices  to  procure  the  introduction  and  passage  of  the  following: 

BILL  FOR  AN  ACT  TO   PROHIBIT  THE   DESTRUCTION 
OF  GOLD  AND  SILVER  COINS 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America,  in  Congress  assembled,  That  any 
person  who  purposely  and  knowingly,  by  any  art,  way  or  means, 
shall,  except  as  authorized  by  law,  destroy  any  gold  or  silver 
coins,  as  such,  which  have  been  or  which  may  hereafter  be 
coined  at  the  mints  of  the  United  States,  or  any  foreign  gold 
or  silver  coins  which  are  by  law  or  which  hereafter  may  be  made 
by  law  current,  or  are  in  actual  use  and  circulation  as  money 
within  the  United  States,  shall,  upon  conviction,  be  imprisoned 
not  more  than  five  years  and  fined  not  more  than  $10,000. 


THE  AMERICAN  MINING  CONGRESS  147 

Needful  Railroad  Legislation 

WHEREAS,  The  American  Mining  Congress  is  composed  of  the  repre- 
sentatives of  an  industry  which  furnished  more  tons  of  freight  to  the 
railways  than  all  other  industries  combined;  and 

WHEREAS,  The  greatest  transportation  need  of  this  country  is  a  large 
increase  in  railroad  facilities;  and 

WHEREAS,  The  railroads  of  this  country  are  engaged  in  a  public 
service,  the  continuous  rendering  of  which  is  vital  to  the  welfare  of  the 
country;  therefore,  be  it 

Resolved,  That  we  favor  and  urge  upon  the  national  Congress: 

First — That  in  any  railway  legislation  ample  provision  shall  be  made 
for  such  regulation  of  railroad  rates  as  shall  produce  such  rate  of  return 
upon  capital  invested  in  railroad  securities  as  to  make  an  investment  in 
such  securities  sufficiently  attractive  to  insure  capital  for  railroad  better- 
ment and  extension; 

Second — That  in  any  railway  legislation  provision  be  made  to  prevent 
strikes  upon  railroads,  until  the  matters  which  may  be  the  subject  of 
controversy  shall  have  been  submitted  to  investigation  and  arbitration 
by  some  tribunal  on  which  the  public  is  represented. 

Aid  for  Alaska 

WHEREAS,  The  interior  of  Alaska  is  a  vast  storehouse  of  mineral  wealth 
and  agricultural  possibility  requiring  only  systematic  development  to 
become  an  empire  comparable  to  that  produced  by  the  development  of 
the  West  since  the  Civil  War;  and 

WHEREAS,  Settlement  naturally  follows  agricultural  development  and 
such  development  is  only  possible  where  there  is  a  market  for  produce, 
and  this  entire  district  depends  directly  or  indirectly  for  its  present 
existence  and  future  growth  upon  the  development  of  its  mining  industry 
to  furnish  such  a  market  and  a  foundation  for  future  prosperity;  and 

WHEREAS,  Under  present  conditions  of  inadequate  transportation  facili- 
ties and  the  practically  prohibitive  cost  of  power  which  have  all  but 
annihilated  an  industry  that  has  produced  $85,000,000  in  gold,  which  is 
only  a  fraction  of  the  amount  that  may  be  recovered,  the  mining  industry 
of  interior  Alaska  is  today  facing  a  crisis  of  possible  extinction;  and 

WHEREAS,  The  Congress  of  the  United  States,  realizing  the  national 
opportunity  inherent  in  the  systematic  development  of  this  Territory  in 
which  the  nation  still  owns  98%  of  the  land,  has  already  expended  $35,- 
000,000  in  the  construction  of  a  railroad  from  tidewater  to  the  interior 
of  Alaska  to  furnish  transportation  facilities,  and  has  provided  an  addi- 
tional $17,000,000  to  insure  its  completion  at  the  earliest  possible  moment; 
and 

WHEREAS,  The  construction  of  a  power  plant  of  sufficient  capacity  to 
supply  adequate  power  for  industrial  and  mining  development  at  a  rea- 
sonable price  can  only  be  accomplished  by  Government  effort,  but  will 
quickly  repay  the  investment  with  interest;  therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  does  heartily  indorse 
these  acts  of  the  Congress  of  the  United  States  and  the  provision  of  funds 


148  REPORT  OF  PROCEEDINGS 

to  carry  the  railroad  to  completion,  and  urges  upon  Congress  the  con- 
tinuance of  a  policy  of  systematic  development  of  Alaska  by  constructing 
a  power  plant  of  sufficient  capacity  to  provide  reasonably  cheap  power 
for  the  mining  industry  of  the  interior,  thus  insuring  the  successful 
development  of  the  mining  industry,  of  agriculture  and  of  the  settlement 
of  the  public  lands  on  the  "Last  Frontier";  and  be  it  further 

Resolved,  That  copies  of  this  resolution  be  transmitted  to  His  Excel- 
lency the  President  of  the  United  States,  to  the  Honorable  the  Secretary 
of  the  Interior,  and  to  the  Senate  and  House  of  Representatives  through 
their  respective  presiding  officers. 

Concerning  Radicalism 

WHEREAS,  It  is  becoming  increasingly  apparent  to  all  thinking  men 
in  the  nation  that  one  of  the  causes  of  the  present  industrial  and  social 
unrest  is  the  deliberate  attempt  that  is  being  made  by  some  men  and 
women  in  all  classes  of  social  life  to  spread  the  doctrine  of  Bolshevism 
and  anarchy  in  this  country;  and 

WHEREAS,  The  objects  of  Bolshevist  propaganda  are  the  overthrow  of 
all  institutions  of  government,  law  and  order,  the  disruption  of  business 
and  commerce  and  the  initiation  of  a  reign  of  anarchy;  and 

WHEREAS,  These  attacks  on  our  institutions,  if  allowed  to  persist,  may 
lead  to  chaos,  rapine,  murder  and  national  disaster,  and  are  fast  becom- 
ing intolerable  to  all  true  American  citizens;  and 

WHEREAS,  The  efforts  of  the  Government  to  combat  these  anarchistic 
influences  have  thus  far  been  inadequate  to  stop  the  spread  of  this 
insidious  propaganda;  and 

WHEREAS,  One  of  the  most  effective  means  of  combating  this  malignant 
national  disease  is  through  the  education  of  the  American  people  to  the 
disastrous  consequence  that  must  follow  unless  it  is  checked;  therefore, 
be  it 

Resolved,  (1)  That  The  American  Mining  Congress  places  itself  on 
record  as  strongly  opposed  to  anarchy,  Bolshevism,  I.  W.  W.-ism  and  all 
other  doctrines  subversive  of  law  and  order  and  the  principles  of  right, 
justice,  liberty  and  the  pursuit  of  happiness  guaranteed  by  the  Constitu- 
tion of  the  United  States ; 

(2)  That  this  Convention  urges  the  properly  constituted  authorities 
to  enforce  to  the  ultimate  limit  all  existing  laws  dealing  with  anarchy, 
sedition  and  treasonable  utterances  or  acts; 

(3)  That  such  additional  laws  as  may  be  necessary  to  insure  the  su- 
premacy of  law  and  order  be  immediately  placed  upon  the  Statute  Books ; 

(4)  That  this  Convention  urges  the  Congress  of  the  United  States 
to  establish  the  means  and  provide  the  funds  to  combat  all  insidious 
anarchistic  propaganda  by  the  education  and  instruction  of  the  people 
in  the  tenets  of  true  Americanism,  through  the  revival  of  the  organiza- 
tion of  four-minute  speakers,  who  performed  such  loyal,  patriotic  and 
effective  service  against  equally  dangerous  propaganda  during1  the  recent 
war,  or  by  the  creation  of  some  new  organization  having  similar  patriotic 
aims  and  ideals; 


THE  AMERICAN  MINING  CONGRESS  149 

(6)  That  a  copy  of  these  resolutions  be  transmitted  to  His  Excellency 
the  President  of  the  United  States,  and  to  the  Senate  and  House  of  Repre- 
sentatives through  their  respective  presiding  officers. 

Proposed  Legislation  in  Behalf  of  Gold  Prospectors 

WHEREAS,  The  production  of  gold  has  decreased  and  is  still  decreasing 
to  such  an  extent  as  to  threaten  all  business  based  upon  gold  payment; 
and 

WHEREAS,  The  decrease  is  partly  traceable  to  the  lack  of  incentive  to 
discovery  and  proper  development  of  new  gold  mines;  and 

WHEREAS,  By  far  the  greater  proportion,  estimated  as  high  as  90%  of 
prospective  gold-producing  territory  of  the  United  States,  is  situated 
upon  or  within  the  boundaries  of  the  National  Forests;  and 

WHEREAS,  The  act  of  creating  the  National  Forests  reserved  all  mineral 
rights  to  the  public,  but  made  no  provision  for  development;  and 

WHEREAS,  The  Forestry  Bureau  has  shown  no  disposition  to  expedite 
development  of  the  mineral  resources  of  territory  within  the  National 
Forests,  and,  in  fact,  to  the  contrary,  has  repeatedly  hindered  develop- 
ment by  withholding  appropriations  manifestly  intended  by  Congress 
for  road  construction,  the  benefits  of  which  should  be  shared  by  the 
mining  districts  situated  thereon,  thereby  creating  a  condition  seri- 
ously detrimental  to  the  development  of  new  mines  as  wholly  destructive 
of  initiative  and  incentive  to  the  prospector  and  operator;  now,  there- 
fore, be  it 

Resolved,  That  Congress  is  hereby  respectfully  requested  to  enact  im- 
mediate remedial  legislation  along  the  lines  of  the  suggested  amendment 
to  Section  8  of  the  Federal  Aid  Road  Act,  hereto  attached  and  made 
part  of  this  resolution,  placing  the  duty  of  recommendations  for  expendi- 
tures of  funds  in  road  construction  in  such  mining  districts  in  the  hands 
of  the  Secretary  of  the  Interior;  and  it  is  further 

Resolved,  That  the  Secretary  of  The  American  Mining  Congress  is 
instructed  to  place  copies  of  this  resolution  and  attached  draft  of  amend- 
ment in  the  hands  of  all  members  of  Congress. 

THE  EXISTING  LAW 

SECTION  EIGHT  OF  THE  FEDERAL  AID  ROAD  ACT  OF  1916 

(Public  Law  No.  156,  64th  Congress) 

(H.  R.  7617) 

SECTION  8.  That  there  is  hereby  appropriated  and  made  avail- 
able until  expended,  out  of  any  moneys  in  the  National  Treasury 
not  otherwise  appropriated,  the  sum  of  $1,000,000  for  the  fiscal 
year  ending  June  30,  1917,  and  each  fiscal  year  thereafter,  up 
to  and  including  the  fiscal  year  ending  June  30,  1926,  in  all 
$10,000,000,  to  be  available  until  expended  under  the  supervision 
of  the  Secretary  of  Agriculture,  upon  request  from  the  proper 
officers  of  the  State,  Territory,  or  County  for  the  survey,  con- 
struction and  maintenance  of  roads  and  trails  within  or  only 
partly  within  the  National  Forests,  when  necessary  for  the  use 
and  development  of  resources  upon  which  communities  within  and 
adjacent  to  the  National  Forests  are  dependent :  Provided,  that 


150  REPORT  OF  PROCEEDINGS 

the  State,  Territory,  or  County  shall  enter  into  a  co-operative 
agreement  with  the  Secretary  of  Agriculture  for  the  survey, 
construction,  and  maintenance  of  such  roads  or  trails  upon  a 
basis  equitable  to  both  the  State,  Territory,  or  County  and  the 
United  States :  .  And  provided  also,  that  the  aggregate  expendi- 
tures in  any  State,  Territory,  or  County  shall  not  exceed  10 
per  centum  of  the  value,  as  determined  by  the  Secretary  of  Agri- 
culture, of  the  timber  and  forage  resources  which  are  or  will  be 
available  for  income  upon  the  National  Forest  lands  within  the 
respective  county  or  counties  wherein  the  roads  or  trails  will  be 
constructed ;  and  the  Secretary  of  Agriculture  shall  make  annual 
report  to  Congress  of  the  amounts  expended  hereunder. 

That  immediately  upon  the  execution  of  any  co-operative  agree- 
ment hereunder  the  Secretary  of  Agriculture  shall  notify  the 
Secretary  of  the  Treasury  of  the  amounts  to  be  expended  by  the 
United  States  within  or  adjacent  to  any  National  Forest  there- 
under, and  beginning  with  the  next  fiscal  year  and  each  fiscal 
year  thereafter  the  Secretary  of  the  Treasury  shall  apply  from 
any  and  all  revenues  from  such  forest  10  per  centum  thereof 
to  reimburse  the  United  States  for  expenditures  made  under 
such  agreement  until  the  whole  amount  advanced  under  such 
agreement  shall  have  been  returned  from  the  receipts  from  such 
National  Forest. 

The  proposed  amendment  follows: 

THE  ABOVE  LAW  AMENDED. 

An  Act  to  amend  Section  8  of  the  Federal  Aid  Road  Act  of  1916, 
pertaining  to  construction  of  roads  or  trails  within  the  boun- 
daries of  the  National  Forests.  To  provide  that  roads  and  trails 
shall  be  constructed  within  the  National  Forests  for  the  use  and 
development  of  Mining  Districts  in  which  the  predominant 
mineral  is  gold. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled:  That  Sec- 
tion Eight  of  the  Federal  Aid  Road  Act  of  1916,  Public  Law  No. 
156,  64th  Congress,  be  amended  to  read  after  the  words,  "receipts 
from  such  National  Forest,"  last  words  in  last  paragraph,  as 
written  in  said  Section  8,  as  follows:  That  where  a  Mining 
District  or  Districts,  in  which  the  predominant  mineral  value  is 
gold,  is  or  are  situated  within  the  boundaries  of  the  National 
Forests  and  are  isolated  from  the  National  or  State  Highway 
systems  to  a  degree  rendering  necessary  the  construction  of  roads 
or  trails  for  their  further  development,  the  Secretary  of  Agri- 
culture shall,  independent  of  State  or  local  co-operation,  upon 
the  recommendation  of  the  Secretary  of  the  Interior  that  min- 
eral discoveries  of  which  gold  predominates  have  been  made  in 
such  districts  and  are  of  such  magnitude  as  to  warrant  the 
construction  of  roads  or  trails  for  their  further  development, 
and  that  in  his  opinion  said  improvement  would  result  in  a  mate- 
rial increase  in  the  production  of  gold,  proceed  through  the 
Bureau  of  Public  Roads,  or  such  other  representative  he  may 
designate,  to  construct  and  maintain  such  roads  or  trails,  for  the 
purposes  herein  stated,  and  shall  assess  the  cost  of  construction 
and  maintenance  of  said  improvements  proportionately  to  the 
mining  district  or  districts  benefited  and  the  National  Forest 
as  the  benefits  derived  from  said  improvements  in  just  propor- 
tion to  each;  provided,  however,  that  not  more  than  one  per 
centum  of  the  gross  annual  output  of  gold  from  the  mines  in  said 
district  or  districts  shall  be  assessed  in  any  year,  said  sums  to 


THE  AMERICAN  MINING  CONGRESS  151 

be  paid  into  the  National  Treasury  each  year,  beginning  with 
the  second  year  after  the  completion  of  said  improvement,  and 
the  said  amounts  to  be  based  upon  the  sworn  statements  of  the 
mine  operators  of  such  districts  and  verified  by  the  Director  of 
the  Bureau  of  Mines  of  the  United  States,  until  the  full  amount 
of  the  cost  of  such  improvement  is  reimbursed  to  the  National 
Government.  Also,  after  completion  of  said  improvements  the 
cost  of  their  maintenance  shall  be  assessed  in  like  proportion  to 
the  National  Forest,  the  agricultural  and  the  mineral  lands,  as 
each  is  proportionately  benefitted  by  the  said  improvement. 

That  for  the  purpose  of  carrying  out  the  provisions  of  this 
amendment  there  is  hereby  appropriated  out  of  any  moneys  in  the 
National  Treasury  not  otherwise  appropriated  to  become  avail- 
able until  expended  immediately  upon  the  passage  and  approval 
of  this  act. 

Permanent  War  Minerals  Work 

WHEREAS,  The  War  Minerals  Division  was  organized  at  a  meeting 
called  by  The  American  Mining  Congress  at  Washington,  D.  C.,  Decem- 
ber 16,  1918,  for  the  purpose  of  securing  aid  for  war  minerals  claimants 
who,  at  the  Government's  request,  lost  money  in  efforts  to  produce  war 
minerals  for  the  use  of  the  Government;  and 

WHEREAS,  As  a  result  of  the  efforts  of  such  War  Minerals  Division 
a  bill  (Public  220)  was  passed  and  approved  March  2,  1919;  and 

WHEREAS,  The  interests  of  the  producers  of  war  minerals  require  that 
there  shall  be  a  continuous  and  permanent  War  Minerals  Division  of 
The  American  Mining  Congress,  to  meet  which  requirements  a  Chief  of 
the  War  Minerals  Division  has  been  permanently  employed;  therefore, 
be  it 

Resolved,  That  a  War  Minerals  Committee  be  appointed  by  the  Board 
of  Directors  of  The  American  Mining  Congress,  to  work  in  conjunction 
with  the  Chief  of  the  War  Minerals  Division  of  The  American  Mining 
Congress,  for  the  purpose  of  carrying  on  the  work  of  legislation,  by 
petitioning  the  Congress  of  the  United  States  to  so  amend  the  law 
approved  March  2,  1919,  as  to  afford  relief  to  all  such  war  minerals 
claimants;  be  it  further 

Resolved,  That  we  tender  to  the  officers  of  the  War  Minerals  Division 
of  The  American  Mining  Congress  our  hearty  appreciation  of  their  effec- 
tive activities  in  carrying  on  the  work  which  resulted  in  Government  recog- 
nition of  the  rights  of  war  minerals  producers,  and  pledge  our  support 
to  the  permanently  organized  War  Minerals  Division  in  carrying  on  its 
future  work. 

More  Uniform  Production  of  Coal 

WHEREAS,  A  more  uniform  production  of  coal  throughout  the  year 
would  stabilize  work  at  the  mines  and  allay  the  dissatisfaction  among 
workers  due  to  irregular  work  and  give  a  more  economical  production 
of  coal  through  the  better  utilization  of  equipment  and  invested  capital; 
and 

WHEREAS,  More  uniform  production  would  distribute  the  transportation 
of  coal  throughout  the  year,  thus  relieving  the  railroads  during  the  fall 


152  REPORT  OF  PROCEEDINGS 

and  winter  seasons,  when  agricultural  products  must  be  transported, 
and  when  the  cost  of  transportation  is  most  expensive;  and 

WHEREAS,  It  is  only  feasible  for  the  ultimate  consumer  to  store  for 
future  use  coal  produced  in  excess  of  current  demands,  and  as  the  time 
for  such  storage  of  coal  from  April  1st  to  September  1st  best  meets  the 
above  conditions;  and 

WHEREAS,  It  is  deemed  advisable  to  stimulate  the  buying  of  coal  during 
this  period  by  lowering  the  price  of  coal;  therefore,  be  it 

Resolved,  That  this  Congress  favors  the  establishment  of  such  differ- 
ential in  freight  rates  on  coal  during  the  period  April  1st  to  September 
1st  and  such  legislation  as  will  permit  coal  operators  to  fix  a  definitely 
lower  price  for  coal  during  such  period,  thus  stimulating  the  early  storage 
of  coal  and  relieving  the  railroad  congestion  during  the  movement  of 
crops. 

For  Opening  Indian  Coal  Lands 

WHEREAS,  Vast  deposits  of  good  coal  are  known  to  occur  on  Indian 
reservations  in  the  United  States,  from  which  not  a  pound  can  be  mined 
for  sale  to  the  public  under  our  present  laws ;  and 

WHEREAS,  The  high  cost  of  coal  in  at  least  one  State  (Arizona)  where 
such  deposits  occur  has  retarded  the  development  of  the  natural  re- 
sources, and  has  led  to  widespread  use  of  fuel  oil,  which  is  admittedly 
a  wasteful  practice;  and 

WHEREAS,  Laws  already  in  force  permit  the  leasing  of  deposits  of 
metallic  minerals  and  of  petroleum  on  Indian  reservations,  and  this  prac- 
tice has  operated  to  the  advantage,  rather  than  to  the  detriment,  of  the 
Indians;  be  it 

Resolved,  That  The  American  Mining  Congress  hereby  petitions  the 
Congress  of  the  United  States  to  enact  such  legislation  as  will  permit 
the  leasing  and  development  of  coal  land  on  Indian  reservations  under 
such  regulations  promulgated  by  the  Secretary  of  the  Interior  as  will 
properly  safeguard  the  interests  of  the  Indians. 

Demanding  Justice  for  Copper  Men 

WHEREAS,  Following  the  outbreak  of  the  European  war,  in  1914,  and 
the  consequent  interruption  of  export  facilities,  the  production  of  copper 
in  this  country  practically  ceased  and  profits  were  eliminated;  and 

WHEREAS,  Thereafter  production  and  prices  increased  until  by  the  end 
of  1916  the  high  level  of  more  than  30  cents  per  pound  was  reached;  and 

WHEREAS,  Despite  the  high  cost  of  production,  copper  producers  then 
agreed  to  supply  the  Government's  requirements  at  16%  cents  per  pound, 
and,  subsequently,  at  23  %  and  26  cents  per  pound,  these  latter  prices 
being  fixed  by  the  Government;  and 

WHEREAS,  With  the  signing  of  the  Armistice,  in  November,  1918,  com- 
plete stagnation  developed  in  the  copper  market,  and  producers  were  left 
with  an  enormous  stock  of  copper  on  hand,  produced  to  meet  the  require- 
ments of  this  Government  and  its  Allies;  and 


THE  AMERICAN  MINING  CONGRESS  153 

WHEREAS,  The  attitude  of  the  copper  producers  throughout  the  war 
was  one  of  unselfish  and  patriotic  devotion  to  the  best  interests  of  the 
Government,  for  which  they  were  repeatedly  and  highly  commended ;  and 

WHEREAS,  These  copper  producers,  in  a  report  by  the  Select  Com- 
mittee on  Expenditures  in  the  War  Department,  have  been  openly 
accused  of  double  dealing  and  possible  fraud;  and 

WHEREAS,  The  American  Mining  Congress  believes  that  a  complete 
investigation  will  reveal  the  honesty  of  purpose  of  American  copper  pro- 
ducers, and  demonstrate  the  injustice  of  such  charges;  now,  therefore, 
be  it 

Resolved,  That  The  American  Mining  Congress  protests  against  the 
report,  casting  opprobrium  upon  the  copper  producers  of  this  country, 
whose  business  was  conducted  at  all  times  during  the  war  under  the 
supervision  and  direction  of  the  War  Industries  Board,  and  other  Govern- 
mental Agencies,  and  insists  that  further  investigation  be  made,  in 
justice  to  the  copper  producers. 


Minerals  Separation  Case 

WHEREAS,  On  November  12,  1918,  the  Federal  Trade  Commission  com- 
menced a  proceeding  against  Minerals  Separation,  Ltd.,  its  subsidiaries 
and  its  agents,  charging  them  with  stifling  and  suppressing  competition, 
and  monopolistic  and  oppressive  practices,  and  violations  of  the  Clayton 
Act  and  the  Federal  Trade  Commission  Act,  in  that  their  contracts  and 
methods  have  tended  (a)  to  prevent  independent  inventors  and  inde- 
pendent manufacturers  from  licensing  and  selling  independent  processes 
and  independent  apparatus,  and  (b)  to  prevent  mine  operators  from 
using  independent  processes  and  independent  apparatus,  and  (c)  to  re- 
quire independent  inventors  and  independent  manufacturers  to  pay  to 
Minerals  Separation,  Ltd.,  its  subsidiaries  and  its  agents,  exorbitant  com- 
missions as  the  condition  of  licensing  and  selling  their  own  processes 
and  apparatus,  and  (d)  to  discriminate  unfairly,  as  between  manufac- 
turers and  investors  similarly  situated,  in  respect  to  the  commissions 
thus  exacted  by  Minerals  Separation,  Ltd.,  its  subsidiaries  and  agents,  and 
(e)  to  compel  mine  operators,  metallurgists  and  engineers  to  surrender 
their  own  inventions  to  Minerals  Separation,  Ltd.,  its  subsidiaries  and 
its  agents,  and  (f )  to  prevent  mine  operators,  metallurgists  and  engineers 
from  publishing  data  regarding  flotation,  and  (g)  to  compel  mine  oper- 
ators, metallurgists  and  engineers  to  withhold  information  regarding 
flotation  in  event  of  litigation,  and  (h)  to  exact  from  mine  operators  an 
exorbitant  royalty  for  the  use  of  the  processes  of  Minerals  Separation, 
Ltd.,  its  subsidiaries  and  its  agents,  and  (i)  to  exact  from  mine  operators 
royalties  upon  the  use  of  processes  and  apparatus  in  which  Minerals 
Separation,  Ltd.,  its  subsidiaries  and  its  agents  have  no  right  whatso- 
ever, and  (j)  to  discriminate  unfairly,  as  between  mine  operators  simi- 
larly situated,  in  respect  to  the  royalties  thus  exacted  by  Minerals  Sepa- 
ration, Ltd.,  its  subsidiaries  and  its  agents,  and  (k)  to  disparage,  falsely 
and  maliciously,  independent  processes  and  independent  apparatus,  inde- 


154  REPORT  OF  PROCEEDINGS 

pendent  inventors  and  independent  manufacturers,  and  the  users  and 
patrons  of  such  independent  processes,  independent  apparatus,  inde- 
pendent inventors  and  independent  manufacturers,  and  (1)  to  claim, 
falsely  and  maliciously,  exclusive  rights  in  excess  of  those  actually  pos- 
sessed by  Minerals  Separation,  Ltd.,  its  subsidiaries  and  its  agents,  and 
(m)  to  threaten,  with  malice,  patent  infringement  suits  based  upon 
claims  of  exclusive  rights  exceeding  those  actually  possessed  by  Minerals 
Separation,  Ltd.,  its  subsidiaries  and  its  agents,  and  (n)  to  intimidate 
and  coerce  mine  operators  to  refrain  from  using  or  patronizing  inde- 
pendent processes,  independent  apparatus,  independent  inventors  and 
independent  manufacturers  by  threatening  to  withhold  from  such  mine 
operators  licenses  under  Minerals  Separation,  Ltd.,  processes  and  appa- 
ratus, and  (o)  to  coerce  independent  inventors  and  independent  manu- 
facturers, through  the  tactics  above  described,  to  enter  into  oppressive 
agreements  with  Minerals  Separation,  Ltd.,  its  subsidiaries  and  its  agents; 
and 

WHEREAS,  The  American  Mining  Congress  has  already  filed  with  the 
Federal  Trade  Commission  a  brief  upholding  the  Commission's  jurisdic- 
tion in  its  proceeding  against  Minerals  Separation,  Ltd.,  its  subsidiaries 
and  its  agents,  and  the  Special  Counsel  of  The  American  Mining  Con- 
gress, in  his  address  before  this  Convention,  has  made  clear  that  the 
mining  industry  of  the  United  States,  now  and  for  all  future  time,  will 
be  in  bondage  to  Minerals  Separation,  Ltd.,  its  subsidiaries  and  its  agents, 
unless  the  proceedings  brought  by  the  Federal  Trade  Commission  are 
prosecuted  to  a  successful  conclusion;  now,  therefore,  be  it 

Resolved  by  The  American  Mining  Congress,  in  Convention  assembled, 
with  members  and  representatives  present  from  every  mining  State  in  the 
Union,  That  The  American  Mining  Congress  hereby  endorses  and  commends 
the  proceeding  of  the  Federal  Trade  Commission  against  Minerals  Separa- 
tion, Ltd.,  its  subsidiaries  and  its  agents,  and  endorses  and  approves  the 
action  of  the  officers  and  the  Special  Counsel  of  The  American  Mining 
Congress  in  supporting  the  Commission's  proceeding;  and  be  it  further 

Resolved,  That  The  American  Mining  Congress  hereby  pledges  the 
assistance  of  its  officers,  its  Special  Counsel,  its  Chapters  and  its  mem- 
bers to  assist  the  Federal  Trade  Commission  in  its  proceeding  to  terminate 
the  intolerable  bondage  which  Minerals  Separation,  Ltd.,  its  subsidiaries 
and  its  agents  have  now  imposed,  and  hereafter  in  perpetuity  threaten 
to  impose,  upon  the  mining  industry  of  the  United  States. 

Encouraging  War  Minerals 

WHEREAS,  The  dire  need  of  the  United  States  for  the  development  of 
minerals  essential  in  prosecution  of  war  was  made  most  evident  during 
the  world  war;  and 

WHEREAS,  Under  the  stimulus  of  this  great  emergency,  our  resources 
in  such  minerals  were  shown  to  be  sufficient;  therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  support  legislation 
fostering  the  production  of  war  minerals,  that  the  United  States  may  be 
industrially  independent  both  in  times  of  peace  and  in  times  of  war. 


THE  AMERICAN  MINING  CONGRESS  155 

War  Minerals  Relief  Measure 

WHEREAS,  In  Section  5  of  the  Act  of  March  2,  1919  (Fortieth  Statutes, 
page  1272),  provision  was  made  to  repay  producers  of  chrome,  tungsten, 
manganese  and  pyrites  net  losses  suffered  by  them  in  an  effort  to  comply 
with  the  requests  or  demands  of  the  Governmental  Agencies  mentioned 
therein  to  produce  the  said  minerals  required  by  the  exigencies  of  the 
war  and  appropriating  the  sum  of  $8,500,000  therefor;  and 

WHEREAS,  Under  the  construction  now  placed  upon  this  law  by  the 
Attorney  General,  large  numbers  of  War  Minerals  Relief  claimants  are 
not  receiving  the  expected  relief;  therefore,  be  it 

Resolved,  That  the  Mining  Congress  strongly  urge  and  foster  legislation 
through  an  amended  act,  which  shall  permit  a  wider  administration  of 
War  Minerals  Relief. 

Physical  Training  Advocated 

WHEREAS,  The  promotion  of  Physical  Fitness  is  a  matter  of  vital  im- 
portance, increasing  production  and  otherwise  furthering  the  Public  Wel- 
fare; therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  urges  upon  all  mining 
operators  the  adoption  of  effective  measures  to  sustain  the  health  and 
physical  welfare  of  all  men  in  the  mining  industry;  and  be  it  further 

Resolved,  That  the  authorities  of  the  National  Government  and  of  the 
various  States  are  hereby  called  upon  to  establish  universally  in  the 
schools  of  the  nation  practical  measures  for  promoting  the  health  and 
physical  fitness  of  the  rising  generation. 

.=*•  i 

Chairman  McCutcheon,  of  the  Committee  on  Industrial  Relations  Reso- 
lutions, read  the  report  of  that  committee,  which  had  already  been  acted 
upon  by  the  regular  Resolutions  Committee,  as  follows,  the  resolution 
being  unanimously  adopted: 

Industrial  Relations  Report 

The  Special  Committee  on  Industrial  Relations  was  in  session  57  hours 
during  the  week,  considering  the  various  proposals  and  reports  referred 
to  that  body  for  consideration.  The  report,  signed  by  Messrs.  E.  P. 
Mathewson  of  New  York,  Harry  L.  Day  of  Idaho,  W.  A.  McCutcheon  of 
Pennsylvania,  Arthur  Thatcher  of  Wisconsin,  George  W.  Taylor  of  Colo- 
rado, Charles  W.  Potts  of  Minnesota,  and  W.  J.  Jenkins  of  Missouri,  is  as 
follows : 

DECLARATION  OF  PRINCIPLES 

We  affirm  that  Public  Welfare  is  paramount  to  the  claims  of 
any  interest  or  class,  and  that  no  action  detrimental  to  that  wel- 
fare can  be  tolerated.  That  all  relations  between  man  and  man, 
between  employer  and  employee,  must  be  subjected  to  the  acid 
test  of  Right,  and  that  no  relation  which  does  not  recognize 
Right  can  obtain  the  support  of  the  public  at  large; 

We  deplore  the  differences  arising  between  Capital  and  Labor, 
resulting  in  strikes,  lockouts  and  curtailments  of  production, 


156  REPORT  OF  PROCEEDINGS 

when  an  increased  production  is  necessary  to  the  welfare  of  this 
nation  and  the  rehabilitation  of  the  stricken  nations  of  Europe ; 

We  believe  that,  with  as  little  delay  as  possible,  plans  should 
be  formulated  suggesting  a  common  ground  for  such  an  under- 
standing between  Capital  and  Labor  as  will  be  most  effective  in 
the  several  industries  and  localities,  and  best  designed  to  secure 
maximum  production  and  efficiency; 

We  believe  that  fundamentally  the  interests  of  Capital  and 
Labor  are  one  and  the  same,  and  that  no  condition  detrimental 
to  either  can  exist  without  being  detrimental  to  the  other.  We 
believe  that  every  dispute  can  be  settled  by  conference,  if  both 
parties  undertake  sincerely  to  be  just  and  fair  in  their  demands. 

We  believe  that  the  present  unrest  in  our  industrial  world  is 
being  fostered  and  encouraged  by  agitators  who  are  antagonistic 
to  the  sound  principles  of  our  Government  and  to  true  Amer- 
icanism, and  that  the  agitation  is  in  furtherance  of  well-laid 
plans  to  warp  the  minds  of  our  people  and  is  calculated  to  incite 
and  encourage  class  hatred  even  to  the  extent  of  revolution; 

We  have  an  abiding  faith  in  the  American  people  and  in  their 
fidelity  to  the  American  principles  of  liberty  and  justice,  and 
we  believe  that  they  will  ultimately  choose  the  right  path  in 
this  crisis,  as  they  always  have  done  on  every  great  question 
of  principle  which  they  have  been  called  upon  to  decide;  but 
we  believe  that  we  all  need  to  be  shown  the  danger  of  listening 
to  the  radical  and  revolutionary  theories  which  are  now  being 
so  extensively  promulgated; 

We  believe  that  all  citizens,  whether  employers  or  the  em- 
ployed, stand  equal  before  the  law  and  before  the  bar  of  judg- 
ment of  the  people;  that  the  freedom  and  liberty  which  is  vouch- 
safed to  all  does  not  mean  license  and  lawlessness;  and  that  no 
action,  individual  or  collective,  can  be  condoned  or  allowed, 
which  is  against  Public  Welfare,  or  which  strikes  at  the  life  and 
property  of  the  people,  or  at  any  of  the  principles  of  our  Con- 
stitution, which  all  true  Americans  hold  dear; 

We  insist  upon  prompt,  impartial  and  energetic  enforcement  of 
the  laws  of  the  United  States,  the  several  States,  and  municipali- 
ties, for  the  protection  of  life  and  property  of  our  citizens,  and 
the  suppression  of  all  license  and  lawlessness; 

We  believe  in  the  right  of  labor  to  organize,  but  we  insist  that 
equal  opportunity  be  given  to  every  man,  whether  union  or  non- 
union, to  work  under  the  same  conditions,  and  under  the  full 
protection  of  our  laws; 

We  believe  that  the  strike  does  not  result  in  the  permanent 
advancement  of  the  workers,  nor  the  lockout  in  that  of  the 
employers,  and  that  both  are  ruinous  to  the  public  welfare,  and 
may,  and  often  do,  result  in  bringing  hardships  and  misery  to 
the  public  at  large; 

We  believe  that  such  legislation  should  be  enacted  which  will 
eliminate  both  the  strike  and  the  lockout  as  means  of  settling 
industrial  differences,  until  all  questions  involved  shall  have  been 
submitted  to,  investigated  by,  and  reported  upon  by  a  public  com- 
mission constituted  for  that  purpose,  the  hearings  of  said  com- 
mission to  be  public,  and  its  proceedings  and  findings  printed  in 
the  daily  papers; 

We  call  for  the  rigid  enforcement  of  our  present  immigration 
laws,  and  the  enactment  of  such  further  legislation  as  may  be 
necessary,  to  suppress  undesirable  immigration,  shut  out  from 
our  shores  all  those  who  are  opposed  to  our  American  institu- 
tions, and  to  make  possible  and  mandatory  the  deportation  of  all 
undesirable  aliens  now  resident  here; 


THE  AMERICAN  MINING  CONGRESS  157 

We  also  call  for  the  rigid  enforcement  of  all  laws  against  the 
publication  or  circulation  of  seditious  and  inflammatory  litera- 
ture and  propaganda,  and  ask  for  the  enactment  of  new  laws 
if  those  existing  are  not  strong  enough  to  meet  present  necessity. 
Therefore,  be  it 

Resolved  by  The  American  Mining  Congress,  That  a  permanent 
committee  be  forthwith  appointed  by  its  Board  of  Directors  to 
make  a  thorough  investigation  of  any  and  all  plans  which  are 
now  in  operation  in  industrial  plants  throughout  the  country; 
to  undertake  the  formulation  of  plans  necessary  to  obtain  the 
desired  legislation;  and  to  stimulate  the  thought  of  the  public 
along  these  suggested  lines — a  full  report  to  be  submitted  by  the 
committee  of  the  members  of  this  Congress. 

Lively  Discussion  Precipitated 

Resolutions  upon  relief  for  gold  producers  and  protection  of  American 
rights  in  Mexico  aroused  some  considerable  discussion,  as  follows: 

Relief  for  Gold  Producers 

WHEREAS,  The  gold  production  of  the  United  States,  which  declined 
so  rapidly  during  the  war  period,  has,  since  the  signing  of  the  Armistice, 
still  further  declined  because  of  the  extreme  economic  pressure  to  which 
the  gold-mining  industry  has  been  subjected;  and 

WHEREAS,  Gold  is  the  standard  of  value  and  the  basis  of  all  credit, 
and  it  is  vitally  important  to  the  financial  and  commercial  life  of  the 
nation  that  the  monetary  reserve  be  protected ;  and 

WHEREAS,  There  is  now  being  used  in  the  arts  and  manufactures  of  the 
United  States  more  gold  than  the  annual  domestic  production,  which  is 
obtained  under  our  present  system  from  the  Treasury  of  the  United 
States  at  a  net  cost  of  $20.67  per  ounce  of  gold;  and 

WHEREAS,  The  actual  cost  of  mining  and  producing  gold  now  far  exceeds 
this  amount  and  many  gold  mines  have  necessarily  ceased  production 
and  other  mines  in  the  United  States,  almost  without  exception,  will  be 
compelled  to  shut  down  and  suspend  their  mining  operations  unless  relief 
can  be  provided  for  the  present  serious  situation  in  the  gold-mining 
industry;  and 

WHEREAS,  It  is  the  opinion  and  purpose  of  this  Congress  that  no  change 
should  be  made  in  the  present  gold  standard  and  unit  of  value  for  the 
monetary  transactions  of  this  and  other  civilized  countries,  and  that  no 
legislation  should  be  had  that  would,  in  any  way,  invalidate  the  obliga- 
tion of  contracts  as  now  existing;  now,  therefore,  be  it 

Resolved  by  The  American  Mining  Congress,  That  the  Congress  of  the 
United  States  be,  and  it  is  hereby  earnestly  petitioned  to  pass  such  speedy 
and  remedial  legislation  as  shall  provide  the  necessary  relief,  and  we 
submit  the  following  suggestion:  that  for  a  period  of  five  years  from 
and  after  the  passage  of  such  legislation,  there  shall  be  paid  to  every 
person  producing  gold  from  the  mines  within  the  United  States  and  its 
possessions  under  such  terms  and  conditions  as  may  properly  be  provided, 
a  premium  of  ten  ($10)  dollars  per  fine  ounce  of  such  gold  so  hereafter 
produced;  said  payments  to  be  made  out  of  funds  to  be  provided  by  an 


158  REPORT  OF  PROCEEDINGS 

excise  of  fifty  (50c.)  cents  per  pennyweight  (ten  dollars — $10 — per 
ounce)  on  the  use,  manufacture  or  sale  of  gold  in  the  United  States  for 
other  than  coinage  or  monetary  purposes  and  from  other  funds  in  the 
Treasury  of  the  United  States,  not  required  for  specific  purposes;  and 

It  is  further  suggested  that  after  five  years  from  the  passage  of  such 
legislation,  the  premium  and  excise  so  to  be  provided  shall  be  adjusted 
in  accordance  with  the  rise  or  fall  in  commodity  prices  as  compared 
with  the  average  for  the  five-year  period  herein  referred  to;  this  read- 
justment to  be  made  each  year  and  until  such  time  as  the  premium  and 
excise  can  be  abandoned  on  account  of  the  restoration  of  a  price-level 
which  will  satisfactorily  maintain  the  normal  production  of  new  gold  in 
the  United  States  to  meet  all  industrial  requirements  of  the  arts  and 
trades. 

MR.  SEAMAN:     I  move  the  adoption  of  the  resolution. 

Mr.  Mathewson  Objected 

MR.  MATHEWSON:  Mr.  Chairman  and  Gentlemen:  This  resolu- 
tion calling  for  a  bonus  to  be  given  to  the  gold-mining  industry  is,  in  my 
opinion,  unsound.  We  have,  as  you  know,  employed  an  economist  to  look 
into  this  question,  and  his  report  to  this  Convention  has  been  embodied 
in  the  resolution.  I  believe  that  this  report  of  our  economist  will  meet 
with  considerable  opposition  when  it  reaches  Washington,  and  I  think 
that  we  should  not  adopt  this  resolution  as  it  stands ;  that  the  report  of 
our  economist  should  go  into  the  resolution  as  a  suggestion  only  as  one 
way  of  handling  this  very  difficult  matter. 

You  will  all  agree  as  to  the  desperate  state  of  the  gold-mining  in- 
dustry in  this  country.  These  conditions  obtain  everywhere,  and  we  should 
not  try  to  enact  class  legislation.  We  have  adopted  here  today  some 
most  powerful  resolutions,  and  The  American  Mining  Congress  has  pro- 
gressed in  the  opinion  of  the  American  public  to  such  a  state  that  we 
are  now  looked  up  to  as  a  body  of  earnest  workers,  who  give  thought 
to  these  things,  and  if  we  put  in  any  resolutions  now,  with  these  other 
strong  resolutions,  that  would  indicate  that  we  had  not  given  the  matter 
careful  judgment,  and  we  were  asking  for  class  legislation,  we  will 
weaken  all  our  other  actions  at  this  Convention. 

I  think,  then,  it  would  be  well  to  amend  this  resolution. 

MR.  SEAMAN:  As  chairman  of  the  Gold  Conference,  I  would  like 
to  ask  if  the  gentleman  is  not  prepared  to  present  this  now — that  Mr. 
Lawrie,  the  economist  of  The  American  Mining  Congress,  explain  the 
reasons  why  and  the  wherefor  of  this  resolution  in  a  short  talk,  if  you 
will  permit  that  to  interpose.  I  do  not  think  there  is  any  great  difference 
of  opinion  between  Mr.  Mathewson,  who  wants  this  done,  and  the  rest 
of  us,  but  it  is  a  matter  of  method  only. 

Lawrie  Defends  Resolution 

MR.  LAWRIE :  On  October  2nd,  in  this  city,  met  the  bankers  of  the 
United  States,  in  convention  assembled.  At  that  time  they  considered 


THE  AMERICAN  MINING  CONGRESS  159 

that  the  decline  in  the  gold  output  was  a  serious  menace  to  the  financial 
welfare  of  the  nation.  At  that  time  they  adopted  and  gave  expression 
to  their  thoughts  upon  the  subject  in  a  very  forceful  and  emphatic  reso- 
lution that  the  Government  of  the  United  States  should  do  something 
to  assist  in  maintaining  the  normal  gold  output  of  the  United  States. 
In  fact,  this  resolution  contains  the  three  "whereas'  "  of  the  resolution 
adopted  by  the  American  Bankers'  Association,  calling  attention  to  the 
fact  that  the  consumption  of  gold  in  the  arts  this  year  will  exceed  the 
supply  from  the  mines,  and,  therefore,  the  difference  will  be  a  depletion 
of  the  monetary  reserve. 

Now,  it  is  a  fact,  gentlemen,  in  the  jewelry  business  they  have  intro- 
duced a  great  deal  of  machinery  in  the  last  year,  and  because  of  that 
fact,  they  require  larger  specimens  upon  which  to  work,  which,  trans- 
lated into  ordinary  English,  means  that  it  is  cheaper  to  substitute  gold 
for  labor.  That,  in  short,  is  the  same  statement  that  involves  the  decline 
in  the  gold  industry,  which  would  be  that  the  producer  cannot  afford  to 
pay  the  price  of  the  cost  of  labor  to  produce  the  article. 

In  order,  therefore,  to  equalize  this  equation,  the  bankers  have  in- 
sisted that  the  Government  do  something  constructive  to  maintain  the 
output  to  offset  the  drain  upon  the  monetary  reserves  for  other  than 
monetary  purposes.  This  resolution,  therefore,  merely  creates  the 
machinery  by  which  the  consumer  of  gold  may  be  equitably  paid  for  the 
cost  of  its  production,  using  the  Government  as  a  mere  agency  of  col- 
lection and  expense. 


Feared  Depreciation  of  Value 

MR.  LUDLOW:  I  want  to  say  one  word  in  this  connection.  I  was  a 
member  of  the  Resolutions  Committee  and  opposed  the  resolution  in  its 
present  form,  and  while  I  appreciate  the  fact  that  the  miners  of  gold 
are  in  a  very  bad  situation  financially,  I  do  not  feel  that  the  proper  solu- 
tion is  in  the  form  of  paying  a  bonus. 

It  was  brought  out  by  Mr.  Lawrie,  in  the  discussion  before  the  com- 
mittee, that  England  was  paying  a  bonus  to  her  gold  producers.  I  looked 
at  the  papers  last  night,  and  the  English  sovereign  in  New  York,  in 
paper,  is  worth  $3.90.  The  gold  sovereign  is  worth  $4.86.  Do  we  want 
our  American  dollar,  which  is  the  same  value  in  both  paper  and  gold, 
to  become  depreciated  as  the  English  sovereign  has  become  depreciated, 
and  is  growing  more  so  as  they  continue  paying  this  bonus? 

I  think  this  resolution  is  extremely  dangerous.  The  paying  of  a  bonus, 
no  matter  how  well  protected  the  law  may  be  against  the  depreciation 
of  the  gold  coin,  will  without  question  repeat  the  history  of  such  attempts 
in  the  past,  and  there  will  be  a  total  disappearance  of  all  gold  coin.  We 
cannot  hope  to  keep  gold  in  circulation  with  a  50  per  cent,  profit  in 
melting  down,  and  I  desire  to  oppose  this  resolution  in  its  present  form, 
and  suggest  that  the  matter  be  referred  for  further  investigation  before 
any  definite  plan  is  proposed.  [Applause.] 


160  REPORT  OF  PROCEEDINGS 

Amendments  Adopted 

MR.  MATHEWSON:  I  offer  an  amendment  to  the  resolution  as  fol- 
lows: After  the  word  "provide"  in  the  fifth  line,  second  to  last  para- 
graph, the  insertion  of  the  words  "We  need  necessary  relief  and  we 
submit  the  following  suggestion."  Also  substitute  the  word  "suggest" 
for  the  word  "recommend"  in  the  first  line  of  the  last  paragraph. 

MR.  BETTS :  Mr.  Mathewson,  your  recommendations  will  be  accepted 
by  the  mover  of  this  motion  without  any  further  question,  because  I 
think  it  is  proper. 

(Mr.  Mathewson  then  read  the  amended  resolution,  which  was  unani- 
mously adopted.  Amended  resolution  appears  above.) 

Demanding  Protection  in  Mexico 

WHEREAS,  American  mining  engineers,  operators  and  employes  have 
gone  to  all  parts  of  the  world  and  have  greatly  assisted  in  the  develop- 
ment of  mineral  resources,  pursuing  their  professions  in  lawful  and 
orderly  manner,  with  full  regard  for  the  rights  of  the  nations  in  which 
they  have  worked  and  for  their  obligations  as  American  citizens  to  their 
own  government;  and 

WHEREAS,  In  particular,  on  repeated  invitations  of  the  Mexican  Gov- 
ernment, prior  to  1910  and  since,  American  mining  engineers,  opera- 
tors and  employes,  in  large  numbers,  have  joined  in  the  industrial  de- 
velopment of  Mexico,  to  the  great  benefit  of  the  Mexican  people;  and 

WHEREAS,  During  recent  years  of  revolution  and  disorder  in  Mexico 
many  American  citizens  in  the  peaceful  pursuit  of  their  profession,  and 
in  the  guardianship  of  properties  intrusted  to  their  care,  have  suffered 
great  losses,  personal  indignities  and  injuries,  and  in  many  cases  suffered 
death;  and 

WHEREAS,  Steps  so  far  taken  by  the  Government  of  the  United  States 
have  not  provided  the  constitutional  protection  which  all  law-abiding 
American  citizens  of  right  expect;  therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  hereby  protests  to  the 
Department  of  State  of  the  United  States  against  the  continuance  of 
policies  by  the  American  Government  that  make  inadequate  provision  for 
the  safety  of  American  mining  engineers,  operators  and  employes  in  the 
practice  of  their  profession  and  in  caring  for  the  business  interests  in- 
trusted to  them;  and  be  it  further 

Resolved,  That  this  Congress  urges  that  the  Government  of  the  United 
States  demand  full  and  immediate  reparation  for  losses  and  injuries 
suffered  by  American  mining  engiheers,  operators  and  employes  in  the 
lawful  exercise  of  their  duties  in  foreign  countries,  and  that  the  Govern- 
ment of  the  United  States  take  such  steps  as  will  insure  that  the  consti- 
tutional rights  of  American  citizens  shall  protect  them  on  our  borders 
and  go  with  them  throughout  the  world ;  and  be  it  further 

Resolved,  That  a  copy  of  these  resolutions  be  forwarded  to  the  Presi- 
dent of  the  United  States  and  the  Congress  through  the  Vice-President 
and  the  Speaker  of  the  House  of  Representatives. 


THE  AMERICAN  MINING  CONGRESS  161 

Mexico's  Delegate  Protests 

SR.  EDMOND  E.  MARTINEZ  (delegate  representing  Mexico) :  Gen- 
tlemen :  Not  only  as  the  representative  of  Mexico  in  this  district,  but  as 
a  man  who  has  taken  an  active  part,  and  a  very  active  one,  for  the  pro- 
motion of  the  good  feeling  that  must  exist  between  the  two  great  re- 
publics of  North  America,  I  see  with  misgivings  the  presentation  of 
resolutions  against  Mexico  by  Walter  Douglas,  delegate  from  New  York 
to  The  American  Mining  Congress.  I  will  tell  you  why: 

Previous  to  the  election  of  President  Madero,  Mexico,  through  mis- 
government,  was  placed  in  a  terrible  predicament.  Our  people  had  lost 
all  of  their  rights  as  civilized  people.  Freedom  of  speech  was  denied 
them — they  had  no  access  to  the  press  of  the  country;  therefore,  we  had 
no  freedom  of  the  press;  our  very  religious  liberty  was  at  stake;  our 
men  were  conscripted  into  the  army  at  the  pleasure  of  our  rulers — in 
a  word,  conditions  had  become  such  that  instead  of  being  a  land  of  free 
men  we  were  a  mob  of  slaves.  The  result  was  that  the  very  worst 
passions  were  turned  loose — our  duly  elected  President  was  assassinated 
by  a  band  of  murderers.  But  in  spite  of  all  a  great  man  arose,  who 
without  elements  of  combat  surrounded  himself  by  a  handful  of  patriots, 
and  the  Sun  of  Justice  shone  again.  That  man  was  our  actual  Presi- 
dent, Mr.  Venustiano  Carranza,  the  friend  of  the  humble  and  the  upholder 
of  our  rights.  But  the  very  same  conditions  which  have  been  obtain- 
ing through  the  civilized  world  have  obtained  also  in  Mexico.  Agitators, 
of  all  descriptions,  Mexicans  and  others,  have,  like  in  the  United  States* 
been  advising  the  masses  to  rebel  against  any  organized  government, 
They  have  advocated  the  propaganda  of  blood  so  they  could  profit  thereby. 
The  time  is  very  limited  to  handle  a  subject  of  this  magnitude  in  the 
proper  manner.  But  I  will  say  this  much:  The  Government,  so  nobly 
presided  over  by  Mr.  Carranza,  has  been  trying  to  give  all  alike  the  guar- 
antees and  protection  the  law  affords.  But  let  me  ask  you  in  all  honesty : 
Can  any  government,  no  matter  how  strong,  tie  completely  the  hands  of 
the  lawless?  Can  the  Mexican  Government  give  all  protection  to  people 
who  live  in  the  country  districts  when  we  see  in  the  most  civilized  cities 
of  other  countries  that  people  are  being  held  up,  murdered  and  robbed 
every  day — countries  which  are  supposed  to  be  in  a  state  of  peace?  The 
Mexican  Government  has  had  its  hands  full,  too,  fighting  these  very 
elements  of  rapine  and  disorder.  In  plain  words,  we  have  been  in  a. 
state  of  war.  If  accidents  have  happened — and  accidents  we  must  calli 
these  attacks  on  individual  foreigners  while  we  are  in  such  a  state have- 
not  others  had  and  still  are  having  them  in  a  state  of  peace?  When  some 
of  the  inhabitants  of  the  United  States,  such  as  Apache  Geronimo,  used 
this  country  as  their  base  for  their  incursions  into  Mexico,  did  the 
Mexican  people  blame  the  Americans  for  their  terrible,  bloody  raids? 
When  the  James  boys  of  unhappy  memory  crossed  into  Mexico  and 
murdered  inoffensive  Mexican  people,  did  we  blame  you?  When  Mexican 
citizens  have  been  burned  at  the  stake  after  being  taken  from  the  au- 
thorities of  the  United  States,  did  we  believe  that  justice  had  ceased  to 


162  REPORT  OF  PROCEEDINGS 

exist  in  this  country?  No,  gentlemen,  the  way  to  solve  this  problem  is 
not  by  antagonizing  the  best  government  Mexico  has  ever  had.  At  a 
period  in  the  history  of  the  world  where  the  social  unrest  is  universal, 
this  will  only  tend  to  make  matters  worse.  Are  you  going  to  give  a 
chance  to  the  enemies  of  law  and  order  to  upset  the  whole  of  our  insti- 
tutions for  freedom  and  liberty?  Shall  we  make  of  this  hemisphere  a  big 
armed  camp  wherein  there  will  be  only  two  bands,  the  Latin-American 
and  the  Anglo-Saxon,  or  shall  we  sympathize  with  each  other  and  put 
forth  all  of  our  best  efforts  to  become  friends  and  brothers?  Mexico 
has  already  given  the  proof.  Not  long  ago  Mexico,  as  a  signator  of  the 
Hague  Tribunal,  took  its  case  with  the  United  States  to  that  same  tri- 
bunal, and  having  lost,  abided  by  its  decision.  And  remember,  gentle- 
men, that  ever  since  the  institution  of  the  Hague  Tribunal,  Mexico  has 
been  the  only  one  to  abide  by  same.  You  are  pretty  well  posted,  gentle- 
men, as  later  events  have  proved  it — nobody  else  has  been  very  anxious 
to  go  to  the  tribunal  to  adjust  their  difficulties,  as  intended.  There  is 
a  way  which  is  paved  with  good  intentions  only. 

This  matter  of  attacks  on  Americans  in  Mexico  is  a  case  which  ought 
to  be  handled  by  more  competent  people  than  myself,  and  more  time 
should  be  given  than  the  present.  This  morning  when  some  of  the  mem- 
bers refused  to  hear  the  case  of  the  Mexican  people  I  was  discouraged. 
It  seemed  to  me  that  when  Mexico  was  concerned  the  matter  was  light 
enough  for  them,  as  they  considered  this  as  trivial — as  a  thing  of  no 
consequence.  But  the  applause  of  others  at  the  mention  of  Mexico  gave 
me  courage,  as  I  knew  then  that  there  were  fair-minded  people  too. 

Mexican  Complaint  Against  United  States 

Can  you  explain  to  me  why  Mexicans  who  were  the  guests  of  your 
nation,  who  had  come  in  good  faith  to  work  here,  were  taken  from  their 
helpless  little  ones,  from  their  wives  and  mothers,  of  whom  they  were 
the  only  support,  and  placed  in  the  ranks  of  your  army,  where  they 
were  unable  to  understand  the  orders  of  the  superior  officers,  who,  not 
taking  into  consideration  their  ignorance  of  the  English  language,  mis- 
treated them  and  finally  sent  them  to  be  butchered  in  another  foreign 
country?  Bandits  did  not  do  this,  gentlemen,  as  has  been  the  case  with 
the  American  victims  in  Mexico. 

Gentlemen,  if  your  Congress  approves  this  unjust  resolution,  you 
will  show  that  you  do  not  wish  to  consider  this  important  matte?  as  to 
the  welfare  of  two  nations  in  the  proper  light.  Remember,  gentlemen, 
that  on  the  other  side  of  the  Rio  Grande  there  are  many  Mexicans  who 
have  the  best  of  wishes  for  the  people  of  the  United  States,  and  that 
they  are  willing  to  settle  any  disputes  that  may  arise  like  men  of  honor 
and  as  lovers  of  the  dignity  of  the  Mexican  nation.  Our  great  Benito 
Juarez  has  said:  "Respecting  the  rights  of  your  neighbor  produces 
peace."  And  I  can  assure  you  that  there  are  lots  of  Mexicans,  President 
Carranza  for  one,  who  are  willing  to  meet  you  more  than  half  way  and 
uphold  justice  and  right. 


THE  AMERICAN  MINING  CONGRESS  163 

Gentlemen,  The  American  Mining  Congress  meets  for  the  welfare  of 
its  members;  as  such,  I  will  ask  you  to  assume  a  kind  attitude  for  the 
people  of  Mexico,  as  this  will  help  overcome  the  obstacles  and  friction 
toward  the  Americans  who  reside  in  our  midst.  Remember  that  many 
American  citizens  will  be  in  position  to  appreciate  your  efforts  for  the 
promotion  of  good  fellowship  and  fairness. 

The  eyes  of  all  America  are  focused  on  this  city  of  St.  Louis  as  one  of 
the  most  prominent  of  the  American  Union.  What  you  will  do  will  be 
taken  by  many  as  a  basis  for  future  developments.  Shall  all  Latin 
America  know  that  you  have  dealt  with  fairness  in  treating  the  Mexican 
problems  ? 

My  advice  would  be  that  our  respective  governments  be  the  ones  to 
handle  all  of  this  matter,  because  they  have  access  to  the  real  data,  while 
this  organization  is  entirely  economic  and  not  political. 

I  assure  you  that  President  Carranza  and  the  Mexican  people  in  gen- 
eral are  with  me  for  the  promotion  of  friendship  and  good  will.  I  thank 
you,  gentlemen. 

Demanding  Protection  from  Home  Government 

MR.  LUDLOW :  In  regard  to  this  resolution,  I  want  to  say  that  it  has 
no  intention  of  reflecting  or  trying  to  bring  up  a  question  in  regard  to 
the  Government  of  Mexico.  The  question  that  was  before  the  Resolutions 
Committee  has  been  a  pressing  one  with  mining  men  ever  since  my  knowl- 
edge of  the  mining  business. 

I  spent  12  years  in  Mexico — I  left  there  eight  years  ago;  so  the  con- 
ditions at  the  present  time  are  not  known  to  me.  But  I  know  that  at  that 
time  American  mining  men  did  not  receive  the  support  of  their  Govern- 
ment in  Mexico.  I  know  that  the  same  thing  is  true  in  Central  America, 
in  South  America,  in  Russia,  Siberia,  and  the  intention  of  this  resolu- 
tion is  to  bring  that  matter  before  the  State  Department.  We  have  used 
the  recent  well-known  troubles  in  Mexico  to  emphasize  the  demand  the 
mining  men  are  making:  that  the  American  Government  must  stand 
behind  them  in  any  part  of  the  world  where  they  want  to  go,  and  where 
their  business  takes  them. 

Bitter  Debate  from  Floor 

MR.  H.  G.  DAVIS  (Clayton,  Mo.)  :  I  should  like  to  reply  to  the  gen- 
tleman from  Mexico.  I  am  a  stockholder  in  a  mine  in  Mexico,  and  for 
a  number  of  years  have  had  interests*  there,  first  under  Diaz,  and  I  would 
like  to  reply  that  today  Mexico  has  no  government. 

MR.  MARTINEZ:     I  protest,  sir,  I  protest. 

MR.  MACBETH :  Mr.  Chairman,  permit  me  to  invite  the  attention  of 
the  gentleman  from  Mexico  to  this  fact — that  he  has  been  accorded  the 
privilege  of  the  floor  at  this  Convention  by  American  citizens,  something 
that  would  not  be  allowed  in  the  City  of  Mexico. 

MR.  MARTINEZ:     I  protest. 


164  REPORT  OF  PROCEEDINGS 

MR.  E.  L.  KNOX:  I  have  been  through  five  years  of  revolution  in 
Mexico,  and  I  wish  to  say  that  the  mining  men  of  Mexico  are  of  a 
class  equal  to  the  mining  men  of  any  country,  but  we  did  not  have  pro- 
tection. I  will  say  that  I  left  Mexico  once  with  my  wife  and  helpless 
child  as  a  British  subject.  I  had  to  deny  my  own  flag  to  get  my  wife 
and  children  out  of  Mexico.  I  owe  my  life  to  the  British  Government, 
and  not  the  American  Government,  and  that  it  is  the  kind  of  protection 
the  American  Government  has  given  us  in  Mexico. 

I 

Resolution  Adopted 

CHAIRMAN  WELLS:  You  have  heard  the  motion  on  the  adoption 
of  the  resolution.  All  those  in  favor  will  signify  by  saying  "Aye";  con- 
trary, "No." 

(Motion  carried.) 

Invitation  from  Spokane 

MR.  SIDNEY  NORMAN  (Washington) :  Will  you  suspend  the  rules 
for  a  moment,  Mr.  Chairman?  At  the  time  you  asked  for  invitations  for 
the  next  meeting  of  this  Convention  I  was  not  able  to  tell  you  that  the 
•city  of  Spokane  would  be  a  tender  for  the  honor  next  year.  [Applause.] 
Perhaps  I  need  not  tell  most  of  the  gentlemen  here  that  Spokane  is  a 
mining  city,  built  up  by  mines,  and  within  100  miles  of  a  district  which 
produces  one-third  of  all  the  lead  in  the  United  States,  and  a  very  large 
tonnage  of  silver. 

If  you  consider  coming  to  Spokane — I  shall  give  you  the  proper  invita- 
tion at  the  proper  time — we  shall  give  you  the  concentrated  hospitality 
of  Oregon,  Minnesota,  the  Dominion  of  Canada — I  think  I  may  safely  say 
the  State  of  Utah. 

Just  one  word  in  answer  to  the  representative  from  Mexico  who  spoke : 
It  is  true  that  in  the  past  week  the  boys  who  have  returned  from  the 
front  have  been  shot  down  by  radical  I.  W.  W.  agitators;  we  all  deplore 
it,  but,  gentlemen,  I  thank  God  I  am  from  the  State  of  Washington, 
where  the  American  Legion  turned  against  the  mob  and  defended  their 
comrades.  I  think  you  will  be  safe  to  come  there  for  the  next  Conven- 
tion. [Applause.] 

Resolutions  Committee  Thanked 

SECRETARY  CALLBREATH:  We  have  heard  some  very  flattering 
votes  of  thanks,  some  of  which  I  think  were  splendid,  but  there  is 
one  body  of  men  in  connection  with  this  Convention  which  has  ren- 
dered such  special  service — the  Resolutions  Committee.  They  have 
worked  hours  in  close  confinement,  and  I  move  you,  therefore,  that  the 
special  thanks  of  this  Convention  be  accorded  to  the  members  of  the 
Resolutions  Committee,  and  particularly  to  its  chairman. 

(Motion  duly  seconded,  put,  and  unanimously  carried  by  rising  vote.) 
CHAIRMAN  WELLS :     There  is  nothing  left  but  for  me  to  congratu- 
late you  upon  the  growth  of  your  organization,  and  to  thank  you  for  the 


THE  AMERICAN  MINING  CONGRESS  165 

support  you  have  given  your  officers.  I  pledge  you  the  faithful  support 
of  my  office  to  make  the  Congress  bigger  and  sounder  and  a  better  servant 
of  yours.  Good  night.  [Applause.] 

ADJOURNMENT  SINE  DIE. 


DELEGATES  IN  ATTENDANCE 

The  registration  of  delegates  during  the  Convention  numbered  980, 
representing  the  following  States :  Alabama,  Alaska,  Arkansas,  Arizona, 
California,  Colorado,  District  of  Columbia,  Idaho,  Illinois,  Indiana,  Iowa, 
Kansas,  Maryland,  Michigan,  Minnesota,  Missouri,  Nevada,  New  Jersey, 
New  Mexico,  New  York,  Ohio,  Oklahoma,  Oregon,  Pennsylvania,  South 
Dakota,  Tennessee,  Texas,  Utah,  Virginia,  Washington,  West  Virginia, 
Wisconsin. 

( 
FOREIGN  DELEGATES 

The  following  foreign  delegates,  officially  credited  to  the  Convention, 
were  present: 

Jean  F.  Audouin,  Member  French  High  Commission,  representing 
mines,  Paris,  France. 

Fedor  F.  Foss,  Chairman  of  the  Special  Mining  Commission  to  the 
United  States,  Petrograd,  Russia. 

Nels  V.  Hansell,  Mining  Engineer,  Stockholm,  Sweden. 

Marc  Sequin,  Belgium,  Consul  General,  St.  Louis,  Mo. 

Constantine  H.  Stoyanoff ,  Mining  Engineer,  representing  the  Bulgarian 
Government,  Sofia,  Bulgaria. 

Edmundo  E.  Martinez,  Mexican  Consul  General,  St.  Louis,  Mo. 


166        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


PAPERS  AND  ADDRESSES 


Delivered  at  the  Twenty-second  Annual  Convention  of 
The  American  Mining  Congress,  St.  Louis,  Mo. 

November  17-21,  1919 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL 

TAXES 

MR.  WADE  KURTZ,  C.  P.  A.,  Kansas  City,  Mo. 

[Mr.  Kurtz  devoted  several  months  to  special  investigation  and 
reporting  work  in  the  Kansas,  Oklahoma  and  Missouri  field.] 

It  is  the  purpose  of  this  paper  to  discuss  some  of  the  more 
important  phases  of  mine  accounting  principles  which  vitally 
affect  the  computation  of  profits,  as  well  as  a  few  interesting 
tax  problems  from  the  accountant's  point  of  view,  but  it  is 
essential  to  explain  that  at  this  time  one  can  only  express 
opinions  in  regard  to  the  Federal  taxation  of  mines,  owing  to 
so  many  of  the  complicated  mining  tax  returns  remaining 
undecided. 

Standardization  of  Mine  Accounting 

In  attempting  to  assist  the  Revenue  Bureau  by  present- 
ing statistics  relative  to  any  mining  camp  as  a  whole,  the 
accountant  is  handicapped  by  the  deficiencies  and  errors  in 
accounting  procedure,  particularly  in  the  smaller  companies. 

As  the  various  classes  of  mining  industries  become  organ- 
ized for  the  protection  of  their  industry  at  large,  it  is  becom- 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     167 

ing  imperative  that  some  consideration  be  given  to  standard- 
izing and  unifying  their  accounting  procedure  and  statistics. 
Few  mine  operators,  even  in  the  same  class  of  mines,  when 
speaking  of  operation  results  and  costs  of  production,  think 
the  same  thoughts  and  speak  the  same  language.  This  con- 
dition operates  against  their  interests  in  protecting  their 
industry  as  a  whole,  because  it  is  practically  impossible  to 
secure  accurate  and  uniform  statistics. 

The  local  conditions  existing  in  each  mine,  and  the  variation 
of  human  nature  in  mine  management,  make  it  practically 
impossible  to  create  a  detailed  uniform  method  of  accounting 
for  each  class  of  mines.  Any  attempt,  therefore,  along  this 
line  must  necessarily  be  flexible  and  adaptable  in  details,  but 
in  principles  of  accounting  procedure  and  the  general  classifi- 
cation of  accounts  the  problem  is  far  from  being  an  impossible 
one. 

I  refer  principally  to  the  general  classification  of  operating 
expenses,  distinctions  between  capital  and  revenue  expendi- 
tures, and  the  computations  of  the  costs  per  unit,  in  order 
that  accurate,  detailed  and  comparable  statements  of  cost  of 
production  may  be  readily  obtained. 

Capital  and  Revenue  Expenditures 

The  distinction  between  capital  and  revenue  expenditures 
varies  somewhat  between  the  construction  or  development 
period  of  a  mine  and  after  the  mine  has  become  an  operating 
concern. 

In  a  new  company  all  expenditures  up  to  the  time  when 
the  gross  revenue  equals  the  operating  expenditures  are  a  part 
of  the  cost  of  the  mine  to  be  returned  later  through  depletion 
and  depreciation,  but  all  revenue  received  during  this  develop- 
ment period  should  be  credited  to  the  cost  of  the  mine. 

With  going  concerns  it  is  correct  to  charge  to  capital  all 
expenditures  for  major  development  work,  such  as  shafts  and 
main  haulage  ways,  but  minor  development  work  should  be 
charged  as  current  operating  expense.  The  intention  under- 
lying the  accounting  practice  is  to  capitalize  such  expenditures 
as  are  useful  over  the  entire  operations  of  the  mine,  and  spread 
the  expense  by  depletion  and  depreciation  allowances,  but 
where  the  benefits  are  temporary  the  expenses  are  to  be 
reimbursed  out  of  the  current  earnings. 


168        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Prospecting  drilling  is  always  considered  as  a  development 
cost  to  be  capitalized,  but  in  many  mines  today  considerable 
drilling  is  done  directly  ahead  of  the  mining  operations  in 
order  to  accurately  locate  the  ore  bodies,  and  in  all  such 
expenditures  the  drilling  cost  is  of  only  temporary  value,  and 
should  be  considered  as  a  mining  expense. 

Were  prospect  drilling  and  development  permitted  to  be 
charged  as  a  current  expense,  there  would  be  nothing  to  pre- 
vent a  corporation  from  using  all  of  its  earnings  for  explora- 
tion, or  development  of  ore  reserves,  and  eliminate  the  pay- 
ment of  dividends  and  taxes.  All  such  expenditures  are 
deferred  charges  against  future  earnings,  but  not  a  current 
operating  expense. 

A  certain  definite  line  of  rectitude  should  be  pursued  in 
distinguishing  between  improvements  charged  to  capital  and 
current  operating  expense,  but  the  hazards  of  mining  and  the 
highly  speculative  nature  of  the  industry  is  just  reason  for 
the  accountant  being  more  flexible  in  his  procedure  by  leaning 
toward  conservatism  and  reimbursing  the  company  out  of 
current  earnings. 

Many  expenditures  which  in  the  ordinary  business  would  be 
considered  as  of  a  more  permanent  character  are  an  operating 
expense  in  the  mining  industry.  After  a  mine  has  once  been 
equipped  to  its  normal  operating  capacity,  there  are  many 
expenses  necessary  to  maintain  the  production,  and  usually 
such  expenditures  are  a  current  expense,  although  their  life 
may  extend  over  a  period  of  years.  As  a  mine  is  worked  to  a 
more  distant  part  of  the  lease,  these  expenses  are  necessary 
and  would  consist  of  such  items  as  mules,  motors,  mine  cars 
and  tracking. 

After  a  definite  line  of  classification  between  capital  and 
revenue  is  once  established,  it  should  be  consistently  followed 
and  not  changed  from  time  to  time  in  order  to  meet  certain 
conditions. 

Depreciation  and  Depletion 

The  two  vital  subjects  of  depreciation  and  depletion  are 
based  upon  the  premise  that  capital  invested  in  plant,  lease 
and  development  is  not  a  permanent  asset  but  a  preliminary 
expenditure  necessary  to  mine  the  ore  reserves,  and  this  in- 
vested value  must  be  recovered  out  of  the  proceeds  of  the  ore 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     169 

sold.  It  is  always  wise  in  a  mining  venture  to  secure  the 
investment  back  as  quickly  as  possible,  owing  to  the  many 
uncertainties  surrounding  the  business. 

Depreciation  and  depletion  are  just  as  true  and  legitimate 
expenses  of  operation  as  money  actually  spent  for  labor, 
material  and  miscellaneous  expense,  and  any  statement  which 
does  not  give  due  consideration  to  them  is  incorrect  to  that 
extent. 

In  mine  accounting  these  two  expenses  are  very  closely 
related,  with  the  result  that  there  is  considerable  confusion 
as  to  where  the  line  of  demarcation  is.  The  items  to  be  con- 
sidered under  each  classification  are  as  follows: 

Depletion:   Cost  of  fee  land,  cost  of  leases,  sinking  shafts, 
prospecting,  and  all  development  work. 

Depreciation:   Building,  machinery,  and  equipment. 

Depreciation  and  depletion  expenses  and  reserves  are  account- 
ing devices  used  for  the  purpose  of  leveling  out  the  expenses 
of  a  company  by  amortizing  the  capital  assets  and  allocating 
to  each  accounting  period  its  just  proportion  of  these  expenses 
even  though  they  are  estimates.  They  cover  the  exhaustion 
and  dissipation  of  values,  which  is  a  much  broader  meaning 
than  the  mere  consumption  of  materialistic  values  due  to  wear 
and  tear. 

The  two  expenses  should  be  computed  separately,  as  the 
life  of  a  mine  seldom,  if  ever,  corresponds  to  the  life  of  the 
plant,  and  this  variation  affects  the  computation  of  deprecia- 
tion. In  a  long  life  mine  the  plant  values  may  be  consumed 
before  the  exhaustion  of  the  mineral  deposits,  which  would 
require  a  rate  of  depreciation  sufficient  to  return  the  plant 
investment  during  the  years  of  its  deterioration  due  to  wear 
and  tear.  In  short  life  mines,  however,  the  dissipation  of 
plant  values  has  nothing  to  do  with  wear  and  tear,  but  is  the 
result  of  the  exhaustion  of  the  ore  deposits,  because  when  the 
mine  is  worked  out  the  plant  has  little  or  no  value.  In  such 
mines  a  rate  of  depreciation  must  be  used  which  will  reim- 
burse the  company  for  its  plant  investment  during  the  few 
years  of  the  life  of  the  mine.  It  must  be  noted,  therefore, 
that  no  general  rate  for  depreciation  can  be  established,  but  it 
is  an  individual  question  to  solve  for  each  mine. 


170        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Rates  of  Depreciation  and  Depletion 

There  are  two  methods  of  ascertaining  the  rates  for  both 
depreciation  and  depletion — the  life  basis  and  the  tonnage 
basis. 

Whenever  possible  the  tonnage  basis  for  computing  both 
depreciation  and  depletion  is  preferable,  because  by  this 
method  the  amount  charged  for  each  as  an  expense  rises  and 
falls  in  accordance  with  the  production  of  the  mine.  During 
years  of  small  production,  when  profits  are  likely  to  be  small, 
the  expenses  are  reduced  in  proportion,  and  during  years  of 
large  production  the  amount  of  depreciation  charged  against 
operations  increases  accordingly.  This  consideration  is  impor- 
tant from  a  tax  point  of  view. 

An  estimate  of  the  total  tonnage  to  be  recovered  is  made, 
and  this  tonnage  is  divided  into  the  two  classes  of  values  to  be 
amortized,  which  establishes  the  rates  per  ton.  These  rates 
are  multiplied  by  the  number  of  tons  produced  to  arrive  at  the 
amount  of  both  depreciation  and  depletion  expense.  If  further 
extensions  of  the  ore  body  are  discovered,  the  number  of  esti- 
mated tons  can  be  increased  accordingly  and  used  to  establish 
new  rates  per  ton.  These  estimates  of  tonnage  to  be  recovered 
should  be  made  at  least  once  a  year.  The  tonnage  basis  for 
depletion  is  the  preferable  one  to  use,  although  in  certain 
isolated  mines,  where  tonnage  estimates  are  difficult  to  obtain, 
the  life  basis  may  be  used. 

Either  the  tonnage  or  life  basis  is  proper  in  computing  the 
depreciation  rate,  as  both  are  recognized  by  the  regulations  of 
the  Internal  Revenue  Bureau,  but  whichever  basis  is  used 
it  must  be  consistently  followed.  On  the  life  basis,  should  a 
mine  be  operating  on  a  five-year  lease,  then  the  plant  values 
must  be  returned  over  the  life  of  the  lease,  or  at  the  rate  of 
20  per  cent,  per  year  less  salvage.  In  deciding  the  method  to 
be  used,  the  practical  business  point  of  view  should  prevail 
over  any  theoretical  accounting  preference. 

There  is  one  pitfall  to  be  watched  in  ascertaining  the  depre- 
ciation charge.  If  capital  improvements  are  made  during 
operations,  all  such  expenditures  should  be  amortized  at  a 
rate  which  will  recover  these  improvements  during  the  remain- 
ing life  of  the  mine.  Otherwise  the  entire  investment  will 
not  have  been  provided  for,  and  the  statements  will  record 
fictitious  profits. 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES  171 

The  above  is  the  accountant's  point  of  view,  but  many  con- 
cerns deem  it  important  during  years  of  their  peak  profits  to 
appropriate  a  proportion  of  their  earnings  toward  amortizing 
their  capital  assets,  while  in  lean  years  the  amount  charged  is 
considerably  reduced.  This  procedure  may  be  very  good  from 
a  business  viewpoint,  as  it  tends  to  steady  payment  of  divi- 
dends, but  it  is  not  correct  accounting  and  leads  to  erroneous 
statements  of  earnings. 

Capitalization 

One  of  the  most  difficult  problems  of  mine  accounting  is  to 
set  up  a  just  and  equitable  capitalization,  and  especially  is  this 
true  since  the  complicated  problems  of  mine  taxation  are  so 
closely  related  to  the  invested  capital.  It  is  generally  recog- 
nized that  it  is  unfair  to  place  a  mining  company  on  the  same 
basis  as  a  less  hazardous  business  where  the  speculative 
factors  are  largely  eliminated.  In  considering  the  capitaliza- 
tion of  a  mine,  it  must  be  understood  that  there  is  a  distinction 
between  capital  assets  and  invested  capital.  In  accounting 
nomenclature  the  capital  assets  are  frequently  referred  to  as 
the  "capital  sum."  The  capital  sum  of  a  mine  refers  to  the 
value  of  the  plant,  lease  and  development.  Under  provisions 
of  the  Federal  Tax  laws  it  may  even  include  appreciation  up 
to  March  1,  1913,  at  which  date  you  are  permitted  to  set  a 
fair  value  upon  your  capital  assets.  Under  the  1918  law  it 
may  also  include  the  value  of  a  new  discovery.  Invested  capi- 
tal, however,  is  more  limited  in  its  scope,  and  includes  the 
value  contributed  by  the  stockholders  either  by  capital  stock 
contributions  or  earned  surplus.  In  revaluing  the  assets  at 
March  1,  1913,  the  increased  valuation  is  included  as  invested 
capital,  provided  the  book  value  at  that  date  was  lower  than 
the  real  value,  owing  to  erroneous  accounting  methods ;  but  if 
the  increased  valuation  is  due  merely  to  appreciation,  the  in- 
crement is  applied  to  the  capital  sum  for  depletion  purposes 
only,  and  is  not  permissible  as  invested  capital.  The  value  set 
up  on  the  books  for  a  new  discovery  is  for  depletion  purposes 
only,  and  cannot  be  included  as  invested  capital  until  such  time 
as  the  discovery  value  has  been  realized  in  cash  or  its  equiva- 
lent. 

This  distinction  between  the  capital  sum  or  the  total  value 
of  the  capital  assets  and  the  investment  capital  or  the  part 


172        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  the  total  capital  belonging  to  the  stockholders  is  frequently 
a  source  of  annoyance  among  business  men  in  understanding 
their  tax  problems. 

In  mine  accounting  a  peculiar  situation  arises  when  you 
attempt  to  compute  the  profit  on  a  particular  mine,  as  the 
corporation  and  tax  laws  permit  certain  adjustments  of  the 
actual  profit  derived  from  mining  operations.  When  the  capi- 
talization of  a  mine  is  kept  strictly  upon  a  cost  basis,  and  the 
speculative  element  of  valuation  is  not  considered,  the  account- 
ing problem  is  simple,  as  all  net  income  after  the  actual  cash 
investment  has  been  returned,  or  provision  made  for  its  return, 
is  the  actual  profit  realized  from  the  mine. 

The  accounting  effect  of  the  corporation  laws  is  to  reduce 
the  profit  of  the  corporation  by  the  extent  of  the  increment 
in  mine  value  taken  up  in  its  capitalization.  The  Federal  Tax 
laws  permit  a  further  reduction  of  taxable  profits  by  allowing 
deductions  from  gross  income  for  discovery  values. 

In  dealing  with  the  tax  problems  of  a  mining  company,  it 
must  always  be  kept  in  mind  that  you  are  endeavoring  to  com- 
pute profits  after  giving  due  consideration  to  invested  capital 
and  the  special  relief  granted  to  mining  companies  by  law. 

Capitalization  When  Plant  and  Development  Cost 
Establishes  Lease  Value 

An  interesting  problem  of  taxation  is  where  a  corporation 
is  organized  and  the  capital  stock  is  paid  for  on  the  basis  of  a 
50-50  interest,  one  party  putting  into  the  corporation  his  lease 
against  the  mill  and  development  of  another.  The  question 
arises  as  to  what  is  the  capitalization  of  such  a  company  for 
tax  purposes.  When  incorporating  by  this  procedure  you  have 
a  definite  standard  of  value  in  the  actual  cost  of  the  mill  and 
development  work  which  equals  the  value  of  the  lease,  and  the 
capitalization,  therefore,  for  tax  purposes  would  be  twice  the 
cost  of  the  mill  and  development.  This  total  value  of  the  mill, 
lease  and  development  is  subject  to  depreciation  and  depletion 
and  can  be  used  for  invested  capital. 

Nominal  Capital 

The  excess  profit  tax  laws  found  many  companies  with  valu- 
able mines  and  a  mere  nominal  capital.  In  many  such  concerns 
the  leases  or  mines  were  acquired  by  individuals  who  pros- 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     175 

pected  and  discovered  the  ore  bodies,  and  later  they  turned 
the  leases  over  to  a  corporation  for  capital  stock  which  they 
at  that  time  realized  in  no  way  represented  the  value  of  the 
lease.  When  the  tax  law  of  1917  was  passed  they  found 
themselves  in  the  position  of  large  earnings  and  a  ridiculously 
small  capital  stock.  In  companies  such  as  this  I  would  advise 
increasing  the  book  value  of  the  capital  assets  and  invested 
capital  to  the  actual  value  at  the  date  of  incorporation,  subject 
to  the  approval  of  the  Revenue  Bureau. 

Tax  on  Mining  Property  Exchanged  for  Capital  Stock 

In  all  mining  companies  where  the  increment  in  value  of  a 
lease  or  fee  is  taken  into  consideration  when  incorporating, 
the  question  naturally  arises  as  to  whether  this  appreciation 
in  value  is  taxable  to  the  stockholders  of  the  company  at  the 
date  of  incorporation.  A  recent  Treasury  decision,  No.  2924, 
indicates  that  the  difference  between  the  original  cost  of  the 
property,  or  its  value  at  March  1,  1913,  and  the  fair  market 
value  of  the  capital  stock  for  which  it  is  exchanged,  is  taxable 
as  profit  to  the  stockholders.  This  question  is  so  vital  to  the 
mining  industry  that  an  effort  should  be  made  by  the  mining 
interests  to  properly  present  to  the  Revenue  Bureau  the  effect 
of  taxing  mine  incorporators  with  this  speculative  and  un- 
realized profit. 

Borrowed  Funds  to  Pay  for  Leases 

The  question  of  organizing  a  mining  company  along  the 
following  lines  is  frequently  considered: 

A  valuable  lease  is  owned  by  an  individual  and  he  wishes 
to  incorporate  for,  say,  $1,000,000.  He  is  anxious  to  have  the 
incorporation  proceedings  handled  in  such  a  manner  as  will 
substantiate  the  capitalization  before  the  Revenue  Bureau, 
and  conceives  the  idea  of  making  it  a  cash  transaction  as 
follows:  He  goes  to  his  bank  and  borrows  $1,000,000  to  pur- 
chase the  capital  stock  of  the  corporation.  After  the  cor- 
poration receives  the  $1,000,000  it  proceeds  to  pay  the  stock- 
holder $1,000,000  for  the  lease,  and  the  individual  then  pays 
back  the  loan.  Will  such  a  capitalization  stand  with  the  Rev- 
enue Bureau? 

This  procedure  may  be  legal  and  possibly  allowed  by  the 
Internal  Revenue  Bureau,  but  there  is  another  very  vital 


174        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

factor  to  consider  before  going  to  the  trouble  of  incorporating 
by  such  a  method.  If  the  deal  is  a  completed  cash  transaction 
to  the  corporation,  it  is  only  fair  to  be  consistent  and  rule  it 
to  be  a  completed  cash  transaction  to  the  individual.  As  he 
has  retained  no  cash  in  the  transaction,  the  tax  on  this  realized 
profit  to  the  individual  would  be  fatal. 

Value  at  March  1,  1913 

One  of  the  tax  problems  for  mines  of  considerable  impor- 
tance is  the  setting  up  of  a  value  for  March  1,  1913.  This 
provision  was  made  to  arrive  at  an  equitable  starting  point 
when  the  Income  Tax  became  constitutional,  because  it  was 
recognized  that  accounting  methods  were  often  crude,  so  that 
the  records  failed  to  accurately  reflect  the  real  capital  of  a 
company,  and  this  provision  gave  mining  companies  an  oppor- 
tunity to  adjust  their  records. 

It  is  sometimes  difficult  to  persuade  mining  men  that  the 
mere  par  value  of  the  capital  stock  issued  has  nothing  to  do 
with  the  actual  invested  capital.  Value  is  the  thing  that 
establishes  invested  capital  in  mines.  If  par  value  of  capital 
stock  were  allowed  as  a  basis  for  invested  capital,  why  capi- 
talize for  merely  a  million,  why  not  make  it  a  hundred  million 
and  pay  little  or  no  tax  ?  This  lack  of  understanding  the  value 
back  of  capital  stock  has  led  many  mining  companies  astray 
in  their  tax  returns. 

When  an  investigation  of  a  mine  at  March  1,  1913,  reveals 
the  fact  that  the  books  do  not  reflect  true  market  values,  an 
adjustment  should  be  made  to  correct  the  books  accordingly. 

New  Discoveries 

When  new  discoveries  of  ore  deposits  are  made  the  value 
of  the  company's  capital  stock  is  enhanced  accordingly,  as  it 
increases  the  number  of  tons  on  which  profits  are  to  be  made, 
and  spreads  the  period  of  amortizing  the  invested  capital.  This 
feature  of  mine  accounting  was  brought  into  prominence  by 
the  Federal  Tax  law  of  1918  by  granting  permission  to  min- 
ing companies  to  set  up  on  their  books,  for  depletion  purposes 
only,  the  value  of  ore  discoveries  irrespective  of  the  cost.  This 
provision  means  that  the  increment  in  value  due  to  the  dis- 
covery— that  is,  the  difference  between  the  appraised  value  and 
the  cost  of  discovery — is  to  be  returned  tax  free  to  the  dis- 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     175 

coverer,  as  well  as  the  cost  of  discovery.  Discoveries  of  exten- 
sion to  known  ore  reserves  are  not  to  be  construed  as  new 
discoveries,  but  merely  increase  the  number  of  tons.  A  new 
discovery  is  the  finding  of  an  entirely  new  and  previously 
unknown  ore  deposit,  and  increases  both  the  number  of  tons 
of  ore  deposits  and  the  value  of  the  ore  body,  provided  it  is 
of  value  materially  greater  than  the  cost  of  discovery.  You 
cannot  predicate  the  existence  of  a  mine  on  two  or  three  drill 
holes,  as  a  commercially  valuable  ore  body  must  be  estab- 
lished. 

The  value  of  the  new  discovery  should  be  recorded  on  the 
books  as  a  part  of  the  capital  assets  and  a  corresponding  credit 
to  a  new  discovery  reserve.  As  new  discoveries  are  mined  out 
and  their  value  realized  in  cash,  the  amount  so  realized  may 
be  considered  as  surplus,  and  included  as  invested  capital, 
provided  it  has  not  been  paid  out  in  dividends.  This  means 
that  the  depletion  account  should  be  charged  to  the  extent  of 
the  discovery  value  taken  out  of  the  mine  and  placed  into  the 
surplus  account. 

The  date  of  the  discovery  is  an  important  factor  in  arriving 
at  its  valuation,  and  a  discovery  usually  may  be  considered 
as  made  when  the  development  has  blocked  out  sufficient  ore 
reserve  to  warrant  the  putting  up  of  a  mill  and  the  sinking  of 
a  shaft. 

You  will  notice,  therefore,  in  proving  the  value  of  a  new 
discovery  it  is  exceedingly  important  to  have  your  drill  records, 
assays  and  other  data  sufficiently  complete  to  substantiate  as 
large  a  value  as  possible.  Companies  who  fail  to  attend  to 
these  details  will  find  themselves  in  a  difficult  position  when 
attempting  to  prove  in  their  discovery  values  at  Washington. 

Again,  it  must  be  recognized  that  you  cannot  take  the 
present  value  and  present  tonnage  and  work  backward  in 
arriving  at  discovery  value,  but  you  must  project  yourself 
back  to  the  known  factors  at  the  discovery  date.  In  estab- 
lishing a  discovery  value  for  a  company  which  has  been  in 
operation  for  several  years,  depletion  must  be  deducted  from 
the  date  of  discovery  in  setting  up  the  value  on  your  books, 
and  any  later  increase  in  the  percentage  of  recovery  does  not 
change  the  value  at  the  discovery  date. 

The  question  is  frequently  asked  as  to  whether  the  dis- 
covery value  can  be  included  as  a  part  of  the  cost  when  com- 


176        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

puting  the  profit  on  a  sale  of  mining  property.  Should  the 
discoverer  work  the  mine  himself  he  would  recover  the  dis- 
covery value  tax  free,  and  it  would  seem  logical  for  him  to 
receive  the  same  amount  tax  free  in  event  of  sale.  However, 
my  opinion  is  that  the  law  provides  for  discovery  value  to  be 
returned  tax  free  through  depletion  only,  and  as  special  relief 
is  given  in  the  20  per  cent,  clause  covering  the  sale  of  mines, 
the  deduction  of  discovery  value  as  a  part  of  the  cost  in  event 
of  a  sale  will  not  be  allowed. 

Apportionment  of  Discovery  Value  Between  Lessor  and  Lessee 

One  of  the  most  perplexing  sections  of  the  law  is  that  which 
permits  the  apportionment  of  the  discovery  value  between  the 
lessor  and  lessee. 

This  provision  of  the  law  reads  well,  but  in  practice  is  diffi- 
cult to  apply  on  account  of  the  conflicting  interests  between 
the  fee  owner,  various  sub-lessees  and  the  mine  operator,  as 
each  of  them  attempts  to  appropriate  as  large  a  part  of  the 
discovery  value  as  possible,  and  the  total  of  the  discovery 
values  claimed  by  all  of  the  interested  parties  cannot  exceed 
a  fair  discovery  value  on  the  property  as  a  unit. 

As  to  the  method  of  apportionment  of  this  discovery  value 
the  regulations  are  not  specific,  but  it  appears  to  be  the  inten- 
tion of  the  Department  to  make  the  apportionment  upon  the 
basis  of  allocating  to  mine  operators  the  engineer's  valuation 
of  the  discovery  after  making  deductions  of  all  relevant  fac- 
tors, including  the  estimated  royalty  to  be  paid,  and  allowing 
to  the  lease  owners  the  royalty  value  allowed  as  a  deduction 
on  the  mine  operator's  valuation.  As  engineering  values  are 
to  an  extent  estimates,  this  allocation  between  the  lessor  and 
lessee  is  frequently  complicated  by  different  engineers  evaluat- 
ing the  various  interests,  the  total  of  which  is  greater  than  a 
fair  value  for  the  property  as  a  whole. 

The  problem  is  further  complicated  when  the  owner  of  a 
lease  sells  it  for  a  bonus  and  retains  a  royalty  interest,  as  two 
points  of  view  are  possible  regarding  the  nature  of  the  trans- 
action. It  can  be  construed  as  a  completed  sale,  and  the  bonus 
considered  as  a  cash  payment  on  account,  while  the  royalty 
interest  is  in  the  nature  of  deferred  payments.  As  title  usually 
passes  in  sales  of  this  kind,  this  viewpoint  has  merit. 

The  other  version  is  to  consider  the  bonus  as  a  royalty  paid 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     177 


in  advance  of  the  extraction  of  the  mineral,  because  all  bonus 
payments  have  the  effect  of  reducing  the  royalty  to  be  paid 
out  of  the  future  operations  of  the  mine. 

It  may  be  that  this  question  will  be  decided  upon  the  facts 
as  they  exist  in  individual  cases,  but  whichever  viewpoint  pre- 
vails it  will  materially  affect  the  tax  computation,  because  it 
depends  upon  the  interpretation  of  the  transaction  as  to 
whether  the  receipts  represent  income  or  a  conversion  of  one 
form  of  capital  into  another. 

If  the  owner  of  a  lease  operates  the  mine,  he  can  avail  him- 
self of  the  discovery  value  through  depletion;  but  should  he 
dispose  of  the  lease  without  a  royalty  interest,  he  will  sell  it  at 
a  figure  which  will  reimburse  him  for  the  discovery  value.  At 
the  same  time,  the  purchaser  of  the  lease  has  fixed  its  value 
so  far  as  he  is  concerned  when  he  arrived  at  a  purchase  price, 
and  no  further  discovery  value  is  permissible  in  his  case,  unless 
he  should  make  further  discoveries.  In  a  transaction  such  as 
this  neither  the  lessee  nor  lessor  can  avail  himself  of  the  dis- 
covery privilege  of  the  tax  laws. 

Apportionment  of  Values  to  Various  Leases 

Many  mining  companies  own  several  mines  in  fee  or  lease- 
hold, all  of  which  have  been  taken  over  by  a  corporation  at  a 
lump  sum  of,  say,  $5,000,000,  the  value  of  which  can  be  sub- 
stantiated. The  company  is  entitled  to  have  this  amount 
returned  tax  free  through  depreciation  and  depletion,  and  the 
question  arises  as  to  whether  it  would  be  permissible  to  return 
this  investment  against  the  operations  of  only  a  part  of  the 
various  mines,  because  the  remainder  have  not  as  yet  been 
opened  for  operations.  This  is  a  natural  question  for  a  mining 
business  man,  but  when  advocating  it  he  forgets  the  future. 
In  my  opinion,  such  a  method  of  computing  depletion  would 
not  be  permissible  by  the  Internal  Revenue  Bureau,  because 
it  is  not  proper  accounting  and  does  not  attempt  to  state 
true  profits.  Again,  the  taxpayer  is  talking  against  his  inter- 
ests by  advocating  this  procedure,  because  the  time  will  come 
when  his  investment  will  have  been  returned,  and  on  future 
operations  he  will  have  no  depletion  charges  against  his  earn- 
ings and  the  tax  laws  are  going  to  be  with  us  for  a  long  time 
to  come. 


178        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  method  to  pursue  in  such  a  company  is  to  allocate  to 
each  tract  of  land  its  just  proportion  of  the  capitalization  and 
deplete  against  the  revenue  of  each  tract  the  value  assigned 
to  that  particular  tract  of  land.  This  is  the  only  correct 
accounting  procedure,  and  has  the  advantage  of  spreading  the 
depletion  charges  over  the  entire  operations  of  all  the  mines. 

Dividends 

The  accounting  procedure  of  a  mining  company  in  so  far 
as  the  payment  of  dividends  is  concerned  depends  upon 
whether  the  company  intends  to  continue  in  business,  or 
whether  it  is  a  liquidating  company.  If  it  is  the  intention 
to  discontinue  after  the  mine  being  operated  is  depleted,  then 
it  is  proper  to  pay  out  to  the  stockholders  the  cash  accumu- 
lated in  bank  regardless  of  whether  it  represents  profit  or  a 
return  of  the  original  investment,  provided  when  such  divi- 
dends are  declared  the  stockholders  are  aware  that  they  are 
partially  receiving  a  return  of  their  investment,  liquidating 
dividends  as  they  are  called. 

If  it  is  the  policy  of  the  company  to  continue  mining  opera- 
tions by  the  purchase  of  other  mines,  then  the  capital  invest- 
ment must  be  preserved  and  possibly  increased  by  the  reten- 
tion of  a  part  of  the  profits.  In  such  a  company  all  dividends 
paid  to  stockholders  must  represent  earned  profits. 

The  payment  of  taxes  on  liquidating  dividends  is  not  an 
uncommon  occurrence,  and  stockholders  should  be  advised  of 
all  liquidating  dividends.  No  liquidating  dividends  can  be  paid 
until  all  of  the  earned  surplus  has  been  distributed  to  the 
stockholders  in  the  nature  of  dividends,  and  after  the  surplus 
has  been  returned  any  further  dividends  are  liquidating  divi- 
dends paid  out  of  the  invested  capital. 

An  interesting  accounting  problem  arises  when  liquidating 
dividends  are  paid,  as  the  books  of  account  and  financial  state- 
ments must  clearly  indicate  a  corresponding  reduction  of  the 
capital  investment  resulting  from  such  payment.  The  first 
impulse  would  be  to  charge  such  liquidating  dividends  against 
the  reserves;  but  this  procedure  results  in  a  very  misleading 
balance  sheet,  because  it  does  not  set  forth  the  reduction  in 
the  value  of  the  capital  assets  and  the  impairment  of  the 
capital  stock.  The  proper  method  of  preparing  a  balance  sheet 
for  such  concerns  is  to  reduce  the  cost  of  the  lease,  mill  and 


MINE  ACCOUNTING  IN  RELATION  TO  FEDERAL  TAXES     179 

development  by  the  depletion  and  depreciation  reserves,  and 
correspondingly  reduce  the  capital  stock  to  the  extent  of  the 
liquidating  dividends  paid. 

Variation  of  Tax  Problems 

In  conclusion,  I  wish  to  explain  that  the  tax  laws  are  like  all 
laws — you  can  only  generalize  on  them  in  discussion — and 
when  it  comes  to  applying  generalities  or  decisions  in  similar 
cases  to  any  particular  company,  it  is  the  invariable  result  that 
there  are  certain  legal,  economic  engineering  and  accounting 
phases  which  differentiate  it  from  all  others. 

The  question  resolves  itself,  therefore,  to  a  study  of  all  the 
relevant  factors,  and  a  decision  must  be  made  upon  the  facts 
as  they  exist  in  each  individual  company. 


180        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


TAXATION   OF   INCOME   FROM   MINING 

MR.  GEORGE  E.  HOLMES,  New  York  City 

Attorney  and  Specialist  on  Income  Tax  Laws,  Author  of 
"Holmes'  Federal  Income  and  Profits  Tax" 

I  have  felt  that  one  of  the  speakers  should  dwell  upon  the 
changes  that  can  be  made  in  the  law  in  order  to  have  the  tax 
bear  more  equitably  upon  the  mining  industry,  if  it  is  neces- 
sary that  it  should  bear  more  equitably  on  that  industry. 

My  statement  will  be  in  the  nature  of  answers  to  two  ques- 
tions: First,  "Should  the  income  tax,  as  it  applies  to  mining, 
be  amended?"  And  the  second,  "Should  the  excess  profits 
tax,  as  it  applies  to  mining,  be  amended?"  There  might  be 
a  third,  and  that  would  be,  "Should  the  excess  profits  tax  be 
abolished  altogether  ?" 

The  present  income  tax  law  is,  in  many  respects,  a  decided 
improvement  upon  the  laws  that  have  preceded  it,  but  it  is  still 
far  from  perfect  and  much  constructive  effort  will  be  neces- 
sary before  it  becomes  a  law  with  which  we  will  all  not  more 
or  less  grumble.  Sometimes  I  think  it  was  a  great  misfortune 
when  our  income  tax  of  1894  was  declared  unconstitutional. 
If  it  had  remained  in  force,  we  would  have  built  up  a  line  of 
precedents  which  would  help  us  in  the  present  situation. 

Under  our  form  of  government,  it  is  necessary  that  the  tax- 
payer indicate  what  he  thinks  is  fair  taxation  on  himself.  We 
have  no  supreme  power  to  determine  what  the  taxpayer  will 
pay ;  the  taxpayer  is  through  his  duly  appointed  representative 
the  power  that  determines  what  form  his  taxes  shall  take,  and 
unless  he  tells  what  he  thinks  is  fair  or  unfair,  just  or  unjust, 
his  representative  is,  of  course,  at  a  loss  as  to  the  proper 
measure  to  pass. 

Both  the  Ways  and  Means  Committee  and  the  Finance 
Committee  of  the  Congress  of  the  United  States  invite  discus- 
sion, criticism  and  suggestions  before  passing  or  amending  any 
important  laws.  This  is  particularly  true  of  the  revenue  laws. 
Thousands  of  pages  of  discussion  appear  in  the  Senate  and 
House  documents  with  respect  to  the  last  revenue  statute. 


TAXATION  OF  INCOME  FROM  MINING  181 

Mining  Congress  Committees 

I  might  say  here  that  a  committee  of  The  American  Mining 
Congress,  under  the  able  direction  of  Mr.  Scott  Thompson,  did 
some  very  valuable  work  in  suggesting  and  urging  provisions 
which,  in  the  opinion  of  The  Mining  Congress,  should  be  in- 
serted in  the  present  statute,  and  many  were  inserted.  I 
think  The  Mining  Congress  should  continue  such  work.  It 
is  the  voice  of  a  large  part  of  the  mining  industry,  practically 
the  whole  of  it.  But  The  Mining  Congress  or  its  committees 
cannot  effectively  do  that  work  unless  the  members  give 
thought  to  the  problems  which  are  closest  to  them,  and  express 
their  views  or  criticisms  and  make  suggestions  which  can  be 
brought  to  the  attention  of  the  Congress. 

I  shall  not  enlarge  very  much  upon  the  treatment  of  the 
present  law,  because  I  think  all  the  members  of  this  meeting 
know  pretty  well  how  the  law  operates,  but  shall  point  out  in  a 
general  way  one  or  two  things.  Mining  companies  are  not 
subject  to  or  given  any  privilege  or  special  treatment  under  the 
income  tax  law,  except  to  the  extent  that  there  are  two  pro- 
visions in  the  law  which  are  intended  to  create  an  inducement 
to  the  discoverer,  the  "wildcatter"  or  prospector.  There  is  also 
a  very  special  provision  applying  to  gold  mining  companies, 
but  this  provision  has  no  bearing  on  the  income  tax  law,  having 
reference  only  to  the  excess  profits  tax. 

In  general,  a  mining  company  is  entitled  to  the  same  deduc- 
tions as  is  any  other  corporation,  i.  e.,  the  ordinary  expenses, 
interest  paid,  taxes  paid  and  other  items.  In  name  but  not  in 
principle  depletion  is  peculiar  to  mining  companies  or  com- 
panies engaged  in  the  exhaustion  of  natural  resources,  and,  as 
a  general  rule,  the  law  does  not  grant  any  special  privilege  to 
the  mining  industry.  Depletion  is  to  natural  resources  what 
depreciation  is  to  physical  property.  It  is  merely  a  means  of 
getting  back  the  capital  invested  in  the  business  enterprise. 
That  capital  ordinarily  is  the  amount  of  money  expended  in 
that  enterprise,  and  which  comes  back  to  the  taxpayer  in  his 
annual  receipts.  Therefore,  part  of  those  receipts  are  set 
aside  and  not  considered  as  income,  because  they  are  a  return 
of  capital.  We  have  that  in  every  business — merchant,  manu- 
facturer, dealer;  in  all  cases  part  of  the  receipts  are  return 
of  capital  and  are  taken  care  of  precisely  the  same  as  in  the 


182        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

mining  business.  In  any  case  if  the  taxpayer  owned  the  prop- 
erty on  March  1,  1913,  the  value  on  that  date  is  the  capital  to 
be  depreciated  or  depleted  instead  of  the  original  cost. 

A  special  provision  with  reference  to  the  miner  is  one  allow- 
ing depletion  on  the  basis  of  the  value  of  his  natural  deposit 
thirty  days  after  discovery.  I  do  not  know  whether  that  was 
originally  intended  to  apply  to  mining  companies  or  only  to  oil 
companies  and  was  applied  to  mining  companies  as  an  after- 
thought. However,  it  is  only  intended  to  apply  to  the  one  who 
discovers  a  mine  or  an  oil  well,  or  gas  well,  and  then  only  if  two 
conditions  coexist  (a)  that  the  property  on  which  the  discovery 
is  made  was  not  purchased  as  a  proven  tract,  and  (b)  that  the 
value  of  the  property  thirty  days  after  discovery  is  materially 
disproportionate  to  the  cost  of  discovery. 

This  provision  was  intended  as  an  inducement  to  the  "wild- 
catter." It  was  represented  to  Congress  that  particularly  in 
the  oil  business  "wildcatting"  had  practically  ceased.  A  man 
very  naturally  said,  "I  will  not  go  out  and  spend  my  time  and 
money  and  take  the  risk  in  the  hope  of  making  a  find,  only  to 
have  the  Government  take  60  or  80  per  cent,  of  my  profit  away 
from  me." 

Are  Depletion  Allowances  Sufficient? 

The  depletion  allowance  based  on  the  value  thirty  days  after 
discovery  is  intended  to  operate  in  favor  of  such  a  discoverer 
when  he  continues  to  own  the  property  and  derives  his  income 
from  the  extraction  or  production  of  the  mineral.  He  is  then 
allowed  to  take  the  value  thirty  days  after  discovery  as  a  basis 
for  depletion  and  then  receive  that  amount  in  the  aggregate, 
free  from  tax,  by  the  time  his  property  is  exhausted.  If  he 
sells  the  property  all  at  one  time,  he  does  not  get  off  quite  so 
easy ;  he  has  to  pay  a  surtax  if  he  is  an  individual,  and  an  excess 
profits  tax  if  a  corporation,  but  in  either  case  such  tax  is  not  to 
exceed  20  per  cent,  of  the  selling  price  of  the  property. 

The  question  is:  "Are  these  inducements  sufficient  to 
encourage  prospecting  and  'wildcatting'  ?"  It  is  a  question  that 
can  only  be  answered  in  the  light  of  experience,  and  I  think  it 
would  be  interesting  and  profitable  to  have  members  of  The 
American  Mining  Congress  express  their  opinion  on  that  point. 
Many  of  you  must  have  been  closely  in  touch  with  that  line  of 


TAXATION  OF  INCOME  FROM  MINING  183 

activity  and  must  know  the  state  of  mind  of  those  engaged  in 
that  line  of  work. 

A  second  question  might  be  stated  thus :  ''Is  that  provision 
which  allows  valuation  thirty  days  after  discovery  practical 
and  workable?"  It  seems  to  me — particularly  with  respect  to 
mines — that  it  is  a  very  complicated  and  difficult  provision. 
You  have  first  to  determine  the  date  of  discovery  and  then 
ascertain  the  value  within  thirty  days  thereafter,  which  is  a 
very  short  period  of  time  in  which  to  have  the  true  value 
reflected.  The  time  originally  proposed  in  the  Senate  bill  was 
one  year  after  discovery,  but  that  did  not  meet  the  views  of 
the  Conference  Committee,  and  it  was  cut  down  to  thirty  days. 
In  every  case  the  matter  of  valuation  thirty  days  after  dis- 
covery presents  very  great  difficulties,  and  at  best  considerable 
latitude  may  be  found  in  the  opinion  of  any  two  persons  who 
may  attempt  impartially  to  appraise  such  values. 

To  determine  just  what  is  a  discovery  and  what  is  the  extent 
of  it  is  perhaps  not  so  greatly  difficult.  If  the  property  was 
acquired  as  an  unproven  tract,  he  must  be  allowed  a  revalua- 
tion for  each  discovery  on  that  tract ;  so  if  the  area  of  the  first 
discovery  is  limited,  he  must  be  considered  to  have  made  a 
second  discovery  as  soon  as  he  gets  beyond  that  area  and  may 
claim  a  new  valuation  for  the  second  discovery,  and  so  on  until 
his  entire  property  has  been  proven  valuable  or  worthless. 

The  valuation  is  a  difficult  proposition.  No  general  rule  can 
be  laid  down,  each  case  must  be  treated  separately,  and  I  think 
it  would  be  well  if  the  members  of  The  American  Mining  Con- 
gress should  consider  whether  or  not  some  other  more  simple 
measure  can  be  substituted  by  amendment  to  the  statute. 
When  a  discoverer  sells  his  property  as  a  whole,  the  tax  is 
limited  to  20  per  cent,  of  the  selling  price.  Can  some  such 
limitation  on  the  tax  or  some  corresponding  arbitrary  allow- 
ance for  depletion  be  devised  to  take  care  of  the  case  where  he 
retains  the  property  and  produces  from  it  ? 

Most  of  our  tax  provisions  are  not  simple.  I  feel  our  ten- 
dency has  been  to  draw  the  whole  question  too  fine,  that  we 
have  been  considering  the  profits  tax  as  a  vast  and  intricate 
scientific  and  mathematical  problem  instead  of  a  business 
proposition.  The  tax  should  be  a  practical,  business  proposi- 
tion by  which  without  too  much  expense,  and  certainly  without 


184        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

endless  delay,  the  taxpayer  can  be  in  a  position  to  know  what 
is  the  tax  liability  charged  against  him. 

I  think  we  shall  always  have  depletion  of  value  based  on 
March  1,  1913.  That  provision  of  the  statute  rests  on  a  very 
solid  principle  which  was  recognized  by  the  courts,  before  it 
expressly  appeared  in  the  statute.  The  constitutional  amend- 
ment which  authorized  the  levying  of  an  income  tax  without 
apportionment  went  into  effect  through  ratification  by  the 
necessary  number  of  states  on  or  about  February  28.  There 
would  be  a  grave  constitutional  question  involved  in  trying  to 
tax  any  gain  which  accrued  prior  to  that  date ;  therefore,  the 
value  of  the  taxpayer's  property  on  that  date  is  always  taken 
as  the  basis  in  calculating  his  profit  or  loss  on  a  subsequent 
sale,  and  any  changes  in  value  prior  to  that  date  are  dis- 
regarded. 

The  value  as  of  to  March  1,  1913,  need  be  fixed  only  once, 
and  will  remain  the  same  for  all  purposes — that  is,  for  depletion 
and  for  determining  the  profit  or  loss  on  the  sale  of  the  prop- 
erty. Depletion  based  on  a  value  thirty  days  after  discovery 
serves  only  one  purpose — that  of  allowing  additional  depletion. 
It  has  no  reference  to  sales. 

Difficult  Valuation 

The  difficulty  of  valuing  property,  as  of  a  date  in  the  past,  is 
very  great.  The  opinion  of  men  making  an  appraisal  will  un- 
consciously be  influenced  by  facts  existing  at  the  time  of 
appraisal  and  which  may  not  have  existed,  or  which  may  have 
had  either  a  greater  or  lesser  bearing  on  values,  at  the  date  as 
of  which  the  value  is  being  appraised. 

However,  the  problem  is  not  insolvable  and  can  be  met  suc- 
cessfully in  the  department.  It  certainly  is  met  in  a  spirit  of 
fairness  to  the  taxpayer.  The  value  for  purpose  of  depletion 
is  the  fair  market  value  as  of  March  1, 1913 — that  is,  the  price 
at  which  the  property  could  have  been  sold  to  a  willing  buyer 
at  that  time.  The  taxpayer  may  establish  that  value  by  show- 
ing the  prices  at  which  similar  properties  were  sold  at  or  about 
March  1,  1913,  by  having  an  engineer  make  an  appraisal ;  other 
evidence  such  as  the  value  at  which  the  property  was  assessed 
for  local  tax  purposes,  values  fixed  in  private  proceedings  in 
litigation  and  in  partnership  accountings,  may  have  more  or 
less  bearing  on  the  value  for  income  tax. 


TAXATION  OF  INCOME  FROM  MINING  185 

The  Treasury  Department  either  accepts  or  rejects  the  tax- 
payer's estimate  of  value,  and  in  case  of  rejection  offers  its 
opinion  as  to  value,  which,  of  course,  must  be  based  upon  rea- 
sonable grounds  and  be  fair.  The  final  decision  on  values,  it 
seems  to  me,  must  in  many  cases  be  a  matter  of  compromise, 
because  there  is  always  a  difference  of  opinion  and  judgment 
as  to  values  and  always  will  be.  I  feel  the  Treasury  Depart- 
ment should  be,  and  is,  sufficiently  liberal  toward  the  tax- 
payer, while  guarding  the  Treasury's  own  interests,  to  allow 
a  value  satisfactory  to  the  taxpayer,  rather  than  exercise  the 
arbitrary  power  which  it  possesses  to  force  the  taxpayer  to 
accept  a  low  value,  make  him  pay  a  tax  on  that  basis,  and  leave 
him  to  seek  redress  in  the  courts,  if  not  satisfied.  A  satisfied 
taxpayer — that  is,  one  who  feels  he  has  had  a  fair  deal — will 
give  his  moral  support  to  the  enforcement  of  the  taxing  statute. 
A  sufficient  number  of  dissatisfied  taxpayers  will  discredit  a 
tax  law  and  make  it  practically  impossible  of  administration. 

One  difficulty  in  the  valuation  of  property  as  of  March  1, 
1913,  is  the  lack  of  data  on  the  subject.  It  has  occurred  to  me 
that  perhaps  The  Mining  Congress  or  its  members  could  be  of 
considerable  value  to  the  industry  at  large,  or  some  great  por- 
tion of  it,  by  the  collection  and  publication  of  data  on  mining 
valuations.  The  methods  used  and  approved  by  engineers  of 
recognized  standing  in  valuing  mines  should  be  made  public. 
Data  on  the  valuations  made  in  various  districts  should  be  dug 
out  of  private  reports  and  spread  before  the  public,  so  far  as 
practicable.  Every  effort  should  be  made  for  co-operation  on 
a  grand  scale  to  establish  values  on  a  uniform,  equal  basis,  as 
of  March  1,  1913,  so  that  all  mine  owners  will  have  the  benefit 
of  the  combined  experience  of  the  industry  in  this  regard. 

In  some  cases — take,  for  instance,  coal  mines,  where,  in  a 
given  locality,  there  are  one  or  two  veins  of  fairly  uniform 
thickness  found  at  about  the  same  depth,  and  the  mining  con- 
ditions are  about  the  same.  It  seems  to  me  that  some  expres- 
sion of  opinion  as  to  what  was  the  value  per  ton  of  the  coal  in 
the  ground  in  that  field  on  March  1,  1913,  would  be  possible 
and  would  be  a  great  aid  to  the  taxpayer  and  the  Treasury 
Department.  Professional  papers  on  this  subject  would  be 
timely  and  valuable. 

The  question  of  apportionment  of  depletion  between  lessor 


186        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  lessee  is  a  very  difficult  and  complicated  one,  but  it  seems 
to  me  to  be  more  of  a  matter  for  settlement  between  the  lessor 
and  lessee  than  one  of  general  interest.  It  depends  in  many 
cases,  if  not  all,  on  the  terms  of  the  agreement  between  them. 
It  is  in  any  case  simply  a  question  of  fact.  I  think  the  steps 
the  Treasury  Department  has  taken  to  solve  this  problem  thus 
far  are  sound.  Their  rules  must,  of  course,  be  general ;  specific 
application  must  be  left  to  the  one  who  has  charge  of  the  assess- 
ment of  tax  in  any  particular  case. 

Mining  Not  Favored 

I  have  noted  that  the  mining  industry  does  not  receive 
specific  consideration  under  the  income  tax  law,  except  to  the 
extent  that  the  discoverer  is  given  an  inducement,  by  way  of 
reduced  taxes  or  a  limit  on  taxes,  to  carry  on  the  work  of 
discovery. 

One  question  that  might  well  be  considered  is  whether  or  not 
the  mining  industry  as  a  whole  is  in  need  of  special  considera- 
tion with  respect  to  income  tax,  on  account  of  the  financial 
hazard  of  the  business,  which  hazard  demands  a  larger  return 
on  the  capital.  Considering  that  question,  it  is  necessary  to 
regard  only  the  present  rates  of  tax.  The  income  tax  on  cor- 
porations is  10  per  cent.,  the  normal  tax  on  individuals  is  8 
per  cent.  The  surtax  on  individuals  runs  up  very  high. 

Should  the  miner — the  man  who  derives  his  income  from  the 
actual  operation  of  mining — if  an  individual,  be  entitled  to  a 
lower  rate  of  tax  on  the  theory  that  he  is  entitled  to  a  higher 
return  on  his  capital  than  the  investor?  Should  there  be  a 
distinction  between  earned  and  unearned  income  in  our  tax 
law? 

The  question  is  very  broad,  involves  many  political  and 
economic  and  practical  questions.  Considering  the  tax  on  cor- 
porations, which  is  10  per  cent.,  it  does  not  seem  to  me  that  the 
mining  industry  is  in  need  of  any  special  consideration,  any 
special  reduction  in  tax.  If  it  be  assumed  that  a  20  per  cent, 
per  annum  return  on  capital  is  necessary  to  make  mining 
attractive,  a  10  per  cent,  income  tax  reduces  that  by  only  2  per 
cent.  That  is  the  corporation  which  without  the  tax  would 
earn  20  per  cent,  on  its  investment  will,  after  the  tax  is  paid, 
still  have  18  per  cent,  net  earnings.  A  corporation  earning  10 


TAXATION  OF  INCOME  FROM  MINING  187 

per  cent,  before  paying  the  tax  would  have  9  per  cent,  left  after 
paying  the  tax.  A  higher  income  tax  rate,  of  course,  would 
bring  about  a  larger  reduction  in  the  net  earnings. 

However,  if  it  should  be  considered  advisable  by  the  mem- 
bers of  The  Mining  Congress  that  the  mining  industry  be  given 
special  consideration  for  the  purpose  of  the  income  tax,  that 
might  be  accomplished  in  a  number  of  ways.  Several  ways 
have  been  considered  in  the  past,  and  some  of  them  discarded 
as  impractical;  many  others  will,  no  doubt,  be  considered  in 
the  future.  It  may  be  done  by  imposing  a  lower  rate  on 
mining  companies  than  on  other  companies.  It  may  be  done 
by  imposing  the  tax  on  an  average  income  of  three  years,  or 
on  the  net  income  of  the  tax  per  year,  whichever  is  lower. 
That  is  not  a  logical  proposition,  but  is  practical,  and  the 
imposition  of  a  tax  is  a  practical  rather  than  a  logical  matter. 

It  might  be  done  by  allowing  the  full  return  of  capital  before 
imposing  any  tax,  a  method  which  has  been  widely  discussed, 
both  approved  and  condemned,  and  which  would  enlist  very 
little  favorable  consideration  in  Congress.  It  might  be  done  by 
allowing  freedom  from  tax  for  a  period  of  years  immediately 
after  commencement  of  business,  long  enough  to  give  the  busi- 
ness a  start.  That  has  been  discussed  and  dropped.  It  might 
be  done  by  establishing  a  reserve  fund  for  the  purpose  of 
buying  new  property,  on  the  theory  that  a  mining  enterprise 
should  be  carried  on  as  a  continuous  business  and  should  not 
be  considered  as  an  enterprise  to  exploit  a  wasting  asset. 

The  last  proposition  was  advocated  before  Congress  last  year 
and  it  was  urged  that  the  oil  industry  be  allowed  to  set  aside  a 
reserve  from  its  annual  income  for  the  purpose  of  exploration 
work  and  the  acquisition  of  new  and  undeveloped  properties, 
such  reserve  fund  to  be  subject  to  control  by  the  Commissioner. 
The  proposal  was  considered  to  have  too  many  difficult  angles 
and  it  was  feared  that  it  would  throw  too  much  burden  on  the 
Treasury  Department  in  exercising  control  over  such  funds. 
Any  suggestion  along  that  line  would  not  be  likely  to  meet  with 
any  better  reception  now  than  in  1918.  I  have  enumerated  the 
several  proposals  above  in  order  that  you  may  know  what  has 
been  attempted.  The  correct  solution  has  not  yet  been  found. 

There  are  certain  proposed  amendments  to  the  income  tax 
law  of  interest  to  the  mining  industry  as  well  as  to  all  other 


188        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

taxpayers.  One  deals  with  a  provision  which  is  now  in  the  law 
granting,  in  a  narrow  way  and  within  narrow  time  limits,  the 
right  to  deduct  the  net  loss  of  a  business  concern  in  one  year 
from  the  income  of  the  preceding  year  or  of  the  following  year, 
or  both,  depending  on  how  large  the  loss  and  the  net  income 
may  be. 

An  Equitable  Ruling 

It  has  long  been  felt  that  a  taxpayer  ought  not  to  be  assessed 
an  income  tax  on  the  net  income  of  a  year,  regardless  of  what 
his  situation  may  have  been  in  preceding  years,  but  that  the 
attempt  should  be  to  assess  the  tax  equitably  with  a  view  to 
having  him  bear  a  tax  burden  corresponding  to  his  net  income 
over  a  longer  period  of  time.  Therefore,  if  he  has  a  loss  in  one 
year,  he  should  be  able  to  set  it  off  against  his  income  of 
another  year  in  order  to  get  at  his  real  net  gain. 

This  was  not  recognized  in  our  laws  until  the  present  law 
was  enacted,  and  then  it  was  recognized  to  a  limited  extent,  i.  e., 
the  business  having  a  net  loss  in  any  fiscal  year  commencing 
after  October  31,  1918,  and  ending  prior  to  January  1,  1920, 
might  set  off  that  loss  against  the  income  of  a  preceding  year 
and  have  its  taxes  for  that  year  reduced  and  payment  refunded ; 
or  if  the  income  of  the  preceding  year  is  not  sufficient,  it  might 
set  off  the  remainder  against  the  following  year.  That  pro- 
vision should  be  made  a  permanent  part  of  the  revenue  system, 
and  I  think  likely  will  be.  It  is  generally  recognized  that  it 
should  have  been  in  our  revenue  system  a  long  time  ago. 

Another  proposal  which  might  be  of  interest  to  every  tax- 
payer is  the  one  to  reduce  the  rates.  I  think,  if  anything,  the 
next  revenue  bill  will  have  slightly  higher  rates,  especially 
higher  surtax  rates  on  incomes  between  five  thousand,  seventy- 
five  and  one  hundred  thousand  dollars.  It  seems,  perhaps, 
unfair  to  tax  incomes  between  those  limits  too  heavily  without 
distinguishing  between  earned  and  unearned  income,  because  it 
includes  the  man  who  is  deriving  his  income  by  the  exercise  of 
his  knowledge  and  his  energy — in  other  words,  the  man  who  is 
building  up  the  principal  from  which  he  will  derive  his  un- 
earned income  later  on  in  life.  But  the  need  of  revenue  will 
require  at  least  the  maintenance  of  the  present  rates  and  very 
likely  some  increase  in  those  rates,  especially  if  it  should  be 
deemed  wise  or  necessary  to  abolish  the  excess  profits  tax. 


TAXATION  OF  INCOME  FROM  MINING  189 

There  is  also  considerable  sentiment  in  favor  of  abolishing 
that  new  provision  which  relates  to  taxability  of  exchange  of 
property  for  property.  Much  could  be  said  against  a  tax  on  the 
sale  of  capital  assets  in  any  event,  at  least  at  highly  graduated 
rates  which  are  intended  to  apply  to  the  amount  which  income 
capital  can  earn  in  a  twelve-month  period,  but  which  are  made 
to  apply  under  our  law  to  larger  amounts  of  income  which 
happen  to  be  realized  in  one  year,  although  earned  by  capital 
over  a  long  period  of  time. 

Whether  or  not  any  change  is  made  with  respect  to  the  sale 
of  gains  from  capital  assets,  it  is  likely  some  change  will  be 
made  with  respect  to  the  exchange  of  property  for  property, 
particularly  the  exchange  of  stock  for  stock  and  the  exchange 
of  property  for  stock  in  the  organization  of  corporations.  The 
present  provisions  of  the  law  have  held  up  many  organizations 
and  reorganizations,  much  new  alignment  of  capital  and  many 
new  propositions,  and  is  not  desirable  if  we  are  to  continue  our 
industrial  progress  in  the  future. 

Other  amendments  will  look  toward  the  simplification  of  the 
law.  That,  perhaps,  is  one  of  the  most  important  things  that 
has  to  be  done  with  the  law  in  the  immediate  future.  The  law 
is  too  complex  and  too  difficult  to  administer  expeditiously  and 
economically.  There  will  always  be  some  complexity,  for  the 
law  must  be  applied  to  very  complex  business  conditions.  But 
attention  should  be  centered  on  the  proposition  to  make  it  as 
simple  as  circumstances  permit.  There  has  been  some  discus- 
sion as  to  advocating  amendments  which  will  be  retroactive 
over  the  years  1917-1918,  but  it  seems  to  be  very  doubtful  if 
that  would  be  wise.  We  all  recognize  that  the  1917  excess 
profits  tax  law  was  theoretically  impossible  of  administration, 
but  a  very  able  advisory  committee — of  which  Mr  Arnold  and 
Mr.  Allen  were  members — worked  it  out  and  established  rules 
and  regulations  which  made  it  operative  and  which  were  very 
fair,  very  reasonable  and  very  equitable  to  taxpayers.  To  dis- 
turb the  settlement  of  thousands  of  cases  by  retroactive  law  at 
this  time  would  be  most  unwise. 

New  Law  Suggested 

I  might  add  a  thought  or  two  of  a  general  nature.  Any 
recommendations  that  are  made  should,  of  course,  be  carefully 


190        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

considered ;  hasty  recommendations  oftentimes  are  worse  than 
none.  Therefore,  The  American  Mining  Congress  should  not 
wait  until  a  bill  is  introduced  before  considering  improvements 
which  may  be  desirable,  but  the  matter  should  be  kept  in  mind 
at  all  times. 

It  is,  perhaps,  impossible  to  predict  when  the  revenue  bill 
will  be  amended.  I  understand  that  Congress  has  caused  steps 
to  be  taken  looking  to  the  preparation  of  a  new  revenue  bill, 
and  the  Treasury  Department  has  one  of  its  staff  of  experts 
working  on  the  drafting  of  a  bill.  The  next  bill  may  not  be 
introduced  until  after  we  have  had  our  Presidential  election, 
but,  in  any  event,  suggestions  for  the  improvement  of  the  law 
should  be  considered  without  delay. 

The  second  question  that  I  shall  discuss  is:  "Should  the 
excess  profits  tax,  as  applied  to  mining,  be  amended?" 
Perhaps  there  would  be  almost  a  unanimous  vote  on  the  ques- 
tion, "Should  the  excess  profits  tax  be  abolished  ?"  It  is  a 
difficult  tax  to  administer,  a  tax  that  does  not  bear  equitably 
on  the  taxpayer,  but  bears  too  heavily  on  the  small  corporation 
and  gives  undue  advantages  to  the  corporation  which  has  re- 
capitalized and  thus  established  new  bases  of  value  for  invested 
capital.  It  was,  of  course,  a  necessary  tax  during  our  war 
period,  and  was  perhaps  enacted  with  a  view  that  it  should  be 
on  the  books  only  during  the  war  period.  Certainly  that  was 
the  view  taken  in  England  in  regard  to  its  excess  profits  tax. 
The  intention  there  was  that  it  should  last  for  only  three  or 
four  years.  Now  England's  need  of  revenue  is  so  great  that 
the  Treasury  is  seriously  considering  retaining  the  excess 
profits  tax  for  a  number  of  years,  if  not  permanently.  The 
question  is  whether  our  need  is  great  enough  to  warrant  the 
continuance  of  our  tax  for  several  years,  and  whether  or  not 
we  have  other  sources  of  revenue  which  might  be  taxed.  The 
opinion  of  economists — and  those  who  have  made  a  study  of 
our  revenue  needs — is  that  we  shall  need  from  four  to  four  and 
one-half  billions  of  dollars  of  revenue  per  annum  for  a  number 
of  years  to  come.  We  have  lost  one  great  source  of  revenue, 
that  coming  from  the  tax  on  liquor,  and  we  are  very  much  in 
doubt  as  to  what  we  can  get  out  of  another  source  of  revenue — 
the  tariff.  We  have  a  source  of  very  large  revenue,  and  that 
is  a  tax  on  sales  or  on  consumption ;  but  such  a  tax  is  not  looked 


TAXATION  OF  INCOME  FROM  MINING  191 

upon  with  favor  by  the  country  at  large,  and  will  probably  not 
be  resorted  to  except  in  extremity.  It  is  certain  that  the  cor- 
porations will  have  to  continue  to  bear  about  as  large  a  burden 
of  the  tax  in  the  aggregate  as  they  now  do,  and  only  if  this  is 
insufficient  to  meet  our  needs  will  any  attempt  be  made  to 
impose  a  tax  on  the  consumption  of  necessities  or  on  sales. 

If  the  excess  profits  tax  law  should  be  abolished,  one  unavoid- 
able result  would  be  an  increase  in  the  income  tax  on  corpora- 
tions, probably  to  15  or  18  or  20  per  cent.  The  question  to 
consider  in  this  connection  is,  "Would  it  be  preferable  for  the 
mining  industry  to  bear  a  flat  income  tax  of  15,  18  or  20  per 
cent.,  and  no  excess  profits  tax,  or  is  it  the  lesser  of  the  two 
evils  to  retain  the  excess  profits  tax  and  make  some  modifica- 
tion or  reduction  in  the  rates  ?" 

It  is  not  likely  that  if  we  do  retain  the  excess  profits  tax 
the  rates  will  be  as  high  as  they  are  this  year — 20  and  40  per 
cent.  It  is  possible  that  the  maximum  rate  will  be  reduced  to 
25  or  30  per  cent. 

If  the  excess  profits  tax  is  continued,  should  mining  com- 
panies have  a  special  reduction  on  account  of  the  risk  or  hazard 
to  the  capital  invested  in  the  business?  There  seems  to  be  no 
doubt  but  that  they  should.  Under  our  present  law  8  per  cent, 
is  considered  to  be  a  fair  return  on  the  capital  invested  in  the 
business.  The  general  excess  profits  deduction  is  8  per  cent, 
of  the  invested  capital  plus  three  thousand  dollars,  but  it  is 
generally  recognized  that  a  return  of  8  per  cent,  is  not  sufficient 
to  make  the  mining  business  attractive. 

British  Law 

England  has  recognized  it.  The  British  percentage  standard 
of  deduction  is  6  per  cent,  in  the  case  of  corporations  and  a 
slightly  higher  rate  in  the  case  of  individuals  or  partnerships. 

While  the  percentage  standard  is  6  per  cent.,  the  British 
statute  provides  that  the  Board  of  Referees  may  increase  that 
rate  for  any  trade  or  industry  wherever  it  deems  it  necessary. 
A  great  number  of  increases  have  been  made,  some  few  of 
which  I  have  noted.  For  instance : 

The  industry  of  chrome  ore  mining  in  Caledonia  is  allowed 
a  deduction  of  22  Va  per  cent,  instead  of  6  per  cent. ;  coal  mines 
in  Bengal,  10  per  cent. ;  coal  mines  in  Great  Britain,  9  per  cent. ; 


192         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

copper  mining  in  Chile,  10  per  cent.;  copper  mining  in  Rho- 
desia, 15  per  cent. ;  gold  mining  in  India  and  Egypt,  27  y^  per 
cent.;  gold  mining  in  Rhodesia  and  West  Africa,  221/2  per 
cent. ;  oil  producing  in  California,  8%  per  cent. ;  tin  mining  in 
Great  Britain,  25  per  cent. 

There  are  many  other  special  rates  of  deduction  fixed  by 
the  Board  of  Referees.  The  additional  deduction  is  intended 
to  cover  in  the  case  of  mining  companies  not  only  the  financial 
risk  which  is  involved  in  that  line  of  business,  but  also  deple- 
tion due  to  the  wasting  of  the  natural  resource.  The  English 
law  does  not  recognize  depletion  for  income  cax  purposes,  and 
the  income  reported  for  income  tax  includes  the  return  of  the 
original  capital,  which  in  our  law  is  taken  out  of  net  income  by 
the  allowance  for  depletion.  The  British  reason  for  not  allow- 
ing depletion  for  income  tax  seems  to  be  based  on  the  fact  that 
the  law  has  been  in  effect  for  a  long  period  of  time,  over  one 
hundred  and  twenty  years,  and  has  been  actively  and  efficiently 
enforced  since  1842.  Those  buying  mining  properties  buy  with 
the  knowledge  that  the  tax  will  be  imposed  on  the  income  with- 
out allowance  for  wastage  of  the  resource,  and  that  considera- 
tion enters  into  and  affects  the  purchase  price.  They  regard 
mining  as  a  wasting  industry,  so  these  extra  rates  are  intended 
to  take  care  of  depletion,  which  is  thus  recognized  for  excess 
profits  tax  purposes  and  also  the  financial  hazard  of  the 
business. 

When  it  was  suggested  to  Congress  in  1917,  and  again  in 
1918,  that  varying  rates  of  excess-profits  tax  deductions  should 
be  allowed,  depending  upon  the  safety  or  hazard  of  the  busi- 
ness, the  answer  was  that  while  such  arrangement  might  be 
possible  in  England,  it  would  not  be  possible  here,  because  of 
the  great  territorial  jurisdiction  of  the  law  and  the  .great 
diversity  of  trades  and  businesses  in  this  country. 

In  this  short  list  of  companies  that  I  read  here,  as  to  which 
the  British  Board  of  Referees  has  increased  the  rate,  I  find 
reference  to  Caledonia,  Chile,  Egypt,  Africa,  even  Calif ornia; 
so  that  neither  territory  nor  the  distinction  between  trades 
and  business  seems  to  bother  the  British  tax  administration. 
The  increases  have  been  made  in  a  great  number  of  cases  and 
distinction  has  been  very  finely  drawn  in  many  of  them. 

I  think,  therefore,  that  The  Mining  Congress  ought  to  con- 


TAXATION  OF  INCOME  FROM  MINING  193 

sides:  very  seriously  whether  or  not  it  should  not  renew  the 
recommendations  that  have  been  made  for  excess  profits  deduc- 
tions at  higher  than  the  basic  rate.  Such  varying  rates  of 
deduction  ought  not  to  be  set  forth  in  the  statute,  but  should 
be  fixed  by  a  board  which  might  be  appointed  by  the  Commis- 
sioner of  Internal  Revenue,  or  by  a  board  of  business  men. 
Some  consideration  should  certainly  be  given  in  the  statute  to 
the  fact  that  different  rates  of  profit  are  necessary  in  the  case 
of  a  bank,  a  mine,  a  manufacturing  company,  or  an  oil  com- 
pany, in  order  that  the  investment  of  capital  may  be  attracted 
to  each. 

Many  suggestions,  no  doubt,  will  be  made  for  other  changes 
in  the  excess  profits  tax  law.  Perhaps  demand  will  be  made 
for  an  entire  change  in  the  provisions  regarding  the  computa- 
tion of  invested  capital.  I  think  a  change  should  be  made  in  the 
present  rules  for  ascertaining  invested  capital  so  as  to  provide 
that  in  all  cases  the  value  of  the  taxpayer's  property  on  March 
1,  1913,  should  be  taken.  This  might  greatly  increase  the 
invested  capital  of  the  corporations  of  the  country,  but  the 
revenue  yield  could  be  regulated  by  an  increase  in  the  rate.  A 
rule  of  that  kind  would  certainly  operate  to  reduce  the  inequi- 
ties that  exist  today  between  taxpayers.  The  most  important 
thing  in  connection  with  the  excess  profits  tax  is  to  make  the 
rule  for  ascertaining  invested  capital  fair  and  equitable  to  all 
corporations.  Invested  capital  is  the  base  on  which  the  tax  is 
measured.  That  base  should  be  uniform  in  all  cases. 

Annual  Valuation 

It  has  been  suggested  that  an  annual  valuation  of  mining* 
properties  should  form  the  basis  of  invested  capital  of  mines, 
but  an  annual  valuation  would  constantly  advance  with  the 
increased  earning  power  of  that  property.  The  excess  earn- 
ings are  the  very  thing  the  tax  attempts  to  reach  and  an  annual 
valuation  would  destroy  the  tax  by  reducing  the  apparent  earn- 
ings to  a  standard  minimum.  Any  scheme  of  annual  valuation 
would,  in  my  opinion,  be  impracticable. 

The  treatment  of  the  discoverer,  and  of  the  miner  who  has 
very  little  invested  capital  employed  in  his  business,  seems  to 
me,  under  any  excess  profits  tax  laws,  must  be  delegated  to 
the  Commissioner  of  Internal  Revenue,  as  is  now  done  in  all 


194        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

cases  where  the  income  or  invested  capital  is  abnormal,  under 
Section  328  of  the  present  law.  In  other  words,  there  must  be 
lodged  with  the  Commissioner  a  sufficient  discretion  to  enable 
him  properly  to  tax  those  taxpayers  whose  taxes  cannot  be 
measured  by  a  fixed  rule. 

It  has  been  stated,  apparently  by  some  one  who  has  no 
financial  interest  in  mines,  that  the  mining  industry  ought  not 
to  be  given  any  special  consideration,  but  rather  ought  to  be 
taxed  a  little  heavier  than  other  industries,  on  the  theory  that 
the  state  has  a  paramount  claim  to  all  natural  resources  in  its 
jurisdiction  and  should  have  a  large  share  of  the  wealth  derived 
therefrom.  That  theory  is  absurd  unless  it  is  the  deliberate 
intent  of  the  state  to  discourage  mining,  or,  on  the  other  hand, 
the  state  undertakes  to  share  the  losses  as  well  as  the  profits 
of  the  miner. 

Another  question  which  might  be  considered  is  the  effect  of 
high  tax  rates.  Have  high  tax  rates  played  an  important  part 
in  the  present  high  cost  of  everything?  So  long  as  we  have 
heavy  taxes,  they  will  be  passed  on  to  the  consumer  and  will  be 
reflected  in  higher  prices.  A  reduction  in  the  tax  rate  would 
tend  toward  a  reduction  in  prices  and  a  return  to  the  normal 
pre-war  basis,  but  a  reduction  of  the  tax  rate  will  not  alone 
accomplish  this  desirable  end.  Many  other  factors,  such  as 
scarcity  of  goods  and  labor,  inflated  currency  and  extrava- 
gance, exercise  as  great,  if  not  a  greater,  influence  on  prices  as 
high  tax  rates. 

In  the  foregoing  I  have  indicated  only  a  few  of  the  many 
questions  that  might  profitably  be  stated  and  discussed  with  a 
view  to  amendment  and  improvement  of  our  income  tax. 
Undoubtedly  many  other  questions  have  occurred  to  members 
of  this  Congress.  The  proper  solution  of  our  tax  problem 
depends  largely  on  the  co-operation  of  taxpayer  and  legislator. 
The  American  Mining  Congress  has  rendered  valuable  service 
in  this  respect  in  the  past  and  will  no  doubt  continue  to  do  so 
in  the  future. 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     195 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES 

T.  O.  McGRATH,  Auditor  of  The  Shattuck-Arizona  Copper  Company, 

Bisbee,  Arizona 

Defining  what  constitutes  "Discovery  of  a  Mine,"  giving 
factors  necessary  for  determining  net  value  of  ore  discovery 
and  present  worth  of  mines  and  the  necessity  for  protection 
against  unjust  state  and  county  and  Federal  income  and  excess 
profits  taxes. 

The  equitable  taxation  of  mines  was  an  unsolved  problem 
that  had  perplexed  the  minds  of  state  and  county  and  mine 
officials  many  years  before  the  enactment  of  the  present 
Federal  tax  laws  which  now  further  complicate  this  problem 
and  add  to  the  unequal  tax  burden  that  had  already  been  car- 
ried by  the  mining  industry. 

Probably  one  reason  why  this  problem  of  mine  taxation  has 
not  been  satisfactorily  solved  has  been  due  to  lack  of  under- 
standing wherein  the  business  of  mining  differs  from  that  of 
other  industries,  and  that  to  endeavor  to  apply  to  mines  a 
method  of  taxation  that  does  not  make  allowances  for  this 
difference  is  bound  to  work  a  hardship  upon  the  mines. 

Therefore,  there  should  be  an  educational  campaign  carried 
out  to  make  this  difference  clear,  which  apparently  is  not  gen- 
erally understood  by  those  who  compose  the  law-making  bodies 
of  the  State  and  Federal  Governments,  and  I  have  attached  as 
a  supplement  hereto  a  statement  showing  five  principal  points 
of  difference  between  mining  and  other  business. 

Taxes  Paid  by  Mines 

The  taxes  paid  by  mines  consist  of  two  groups,  viz : 
Federal  Taxes. 
State  and  County  Taxes. 

The  Federal  taxes  consist  of  capital  stock  tax,  income  tax 
and  excess  profits  tax. 

A  capital  stock  tax  is  paid  by  all  mines  whose  capital  is  in 
excess  of  $99,000,  which  tax  is  more  or  less  of  a  nominal  one. 

The  Federal  income  tax  is  paid  by  mines  upon  the  total 
amount  of  the  net  return  for  each  year,  regardless  of  whether 
or  not  the  mine  has  proven  its  investment. 


196        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  excess  profits  tax  is  paid  by  all  mines  whose  income  is  in 
excess  of  8  per  cent,  of  its  invested  capital  for  any  one  year, 
regardless  of  whether  or  not  the  value  of  the  property  invest- 
ment has  been  proven  or  that  any  income  had  been  received  in 
previous  years. 

All  mines  pay  state  and  county  taxes  to  the  state  and  county 
in  which  the  property  is  situated,  regardless  of  whether  or  not 
the  mine  is  a  prospect  or  a  proven  property. 

The  state  and  county  taxes  are  based  upon  the  assessed 
value  of  the  mining  property  and  the  improvements,  and  the 
rate  of  tax  is  determined  by  the  amount  that  must  be  raised 
to  take  care  of  the  state  and  county  expense.  Therefore,  there 
can  be  no  complaint  made  by  the  mines  as  to  the  tax  rate  that 
would  not  be  applicable  to  other  industries,  as  this  rate  can  be 
reduced  only  by  reducing  the  state  and  county  expenses,  or  by 
building  up  and  enlarging  the  industries  of  the  state  and 
counties.  However,  the  question  as  to  the  fairness  of  the 
valuation  placed  upon  mines  can  be  raised  and  the  method  of 
determining  this  value  can  be  investigated  to  ascertain 
whether  or  not  the  valuation  assessed  is  fair  and  equitable  in 
comparison  with  the  valuation  placed  upon  other  property. 

Present  Law  a  Hardship 

The  failure  by  the  Federal  Government  to  recognize  the 
inherent  differences  of  mining  as  compared  to  other  business 
has  resulted  in  making  the  present  income  and  excess  profits 
taxes  work  a  hardship  upon  mining,  and  if  the  Federal  tax 
laws  and  the  Treasury  Department  Regulations  governing  the 
interpreting  of  these  laws  are  not  amended  there  will  result  a 
slowing  up  in  the  future  development  of  mines.  As  mining 
is  a  wasting  industry,  any  let-up  in  new  development  will 
eventually  result  in  a  gradual  reduction  in  the  mineral  pro- 
duction of  the  United  States. 

While  it  is  the  belief  of  many  that  no  mine  in  the  course 
of  development  should  pay  a  capital  stock  tax  until  the  value 
of  the  mining  investment  has  been  proven,  nevertheless,  as  the 
capital  of  most  development  mines  does  not  exceed,  to  any  great 
extent,  the  amount  of  the  capital  exempted  from  taxation,  the 
amount  of  such  payments  by  development  mines  is  not  suffi- 
cient nor  of  such  general  importance  to  warrant  any  consider- 
able comment. 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     197 

Protection  Against  Unjust  Federal  Income  Taxes 

The  injustice  of  the  present  Federal  income  taxes  is  due  to 
the  failure  of  the  Treasury  Department's  Regulations  to  define 
what  is  income  from  mines,  which  make  all  returns  received 
from  sale  of  metals,  etc.,  in  excess  of  the  operating-expense 
income  subject  to  income  taxes. 

The  law  and  the  Treasury  Department's  Regulations  do  not 
make  any  distinction  between  net  returns  from  a  prospect  and 
income  from  a  proven  mine.  For  instance,  it  is  customary  for 
the  prospect  mines,  or  mines  in  the  course  of  development,  to 
ship  all  the  commercial  ore  taken  out  in  the  development  work, 
in  order  to  help  carry  expense  of  development,  and  when  the 
prices  of  metals  are  above  the  average,  to  ship,  if  possible,  all 
the  ore  that  was  discovered  by  development  work,  regardless 
of  whether  or  not  there  has  been  discovered  total  ore  reserves 
of  a  net  value  in  excess  of  the  actual  investment  in  order  to 
insure  the  return  of  investment,  or  as  much  thereof  as  possible 
when  times  are  favorable. 

Therefore,  it  often  happens  that  development  mines  that 
have  not  yet  proven  their  investment  will  show  at  the  end  of 
a  year  a  large  surplus  above  the  regular  development  expense. 
This  is  nothing  more  than  a  liquidation  of  the  investment 
which  has  not  yet  been  proven  and  which  is,  as  a  rule,  rein- 
vested in  further  development  work  or  equipment. 

However,  according  to  the  requirements  of  the  income  tax 
law  and  regulations  of  the  Treasury  Department,  there  will 
have  to  be  entered  against  such  a  surplus  a  depreciation  and 
depletion  charge,  and  an  income  tax  paid  on  the  remainder 
which  is  considered  income,  regardless  of  the  fact  that  there 
can  be  no  such  thing  as  depletion  or  income  until  the  invest- 
ment has  been  proven. 

Therefore,  to  pay  such  a  tax  before  the  value  of  the  invest- 
ment is  proven  is  simply  paying  a  tax  upon  a  liquidation  of 
capital,  and  should  development  work  in  the  future  fail  to 
discover  sufficient  ore  of  a  net  value  in  excess  of  the  original 
investment,  such  tax  payments  will  reduce  the  amount  of 
return  of  the  original  investment  to  the  investors,  or  the 
amount  that  can  be  reinvested  in  further  development  work. 

To  cure  this  injustice  there  should  be  a  provision  made  in 
the  Treasury  Department's  Regulations  defining  income  from 


198        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

mines,  so  as  to  protect  the  development  mine  from  paying  an 
income  tax  on  any  liquidation  of  its  capital  invested  until  the 
investment  has  been  proven. 

Protection  Against  Unjust  Excess  Profits  Taxes 

As  an  excess  profits  tax  must  be  paid  on  all  income  for  any 
one  year  in  excess  of  8  per  cent,  of  invested  capital,  the  income 
of  a  proven  mine  which  has  passed  from  the  development 
stage  into  the  income-earning  stage  must  bear  this  excess 
profits  tax  on  any  portion  of  its  first  and  the  following  year's 
income — that  is,  in  excess  of  8  per  cent,  of  the  invested  capital, 
regardless  of  the  fact  that  the  business  may  have  labored  for 
years  without  any  return  upon  its  investment  to  bring  the 
property  to  the  income-earning  stage. 

The  average  time  required  to  bring  the  prospect  mines  to 
the  income-earning  stage  is  approximately  six  years,  during 
which  time  no  return  is  received  on  the  investment.  How- 
ever, should  a  proven  mine  wish  to  force  its  production  during 
the  first  several  years  of  income-earning  operations  in  order 
to  take  advantage  of  high  metal  prices  and  to  insure  its  stock- 
holders an  immediate  income  return  sufficient  to  give  8  per 
cent,  not  only  for  the  present  year,  but  for  the  many  pre- 
ceding years  when  no  return  was  received,  it  will  be  able  to  do 
so  only  by  paying  first  a  graduated  excess  profits  tax  on  all  net 
income  for  each  year  above  the  stipulated  exemption. 

Unfair  and  Unjust 

It  is  plain  to  anyone  who  has  considered  this  subject  that 
to  require  the  income  from  a  proven  mine  to  bear  an  excess 
profits  tax  before  there  shall  have  been  returned  to  the  stock- 
holders at  least  8  per  cent,  per  year  on  the  average  invested 
capital  for  each  year  that  it  has  been  in  the  business  is  unfair 
and  unjust;  also  that  the  amount  that  receipts  may  exceed 
the  expenses  of  any  development  mine  should  be  free  of  all 
income  and  excess  profits  taxes  until  the  net  value  of  all  ore 
discovered  is  in  excess  of  the  amount  of  the  investment,  other- 
wise the  development  mine  has  no  assurance  that  it  will  not 
have  to  pay  Federal  taxes  upon  a  return  of  capital. 

State  and  County  Taxes 

At  the  present  time  there  is  no  uniformity  in  the  methods 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     199 

of  states  and  counties  to  determine  mine  valuation  for  the 
purpose  of  taxation. 

Also,  as  a  rule,  the  states  and  counties  have  failed  to  recog- 
nize that  the  nature  of  the  mining  business  is  different  from 
that  of  other  business,  due  probably  to  the  great  difficulty  to 
determine  the  true  value  of  a  mine,  which  has  resulted  gen- 
erally in  excessive  state  and  county  taxes. 

There  have  been  tried  many  methods  of  determining  the 
valuation  of  property  within  the  states  and  counties  for  the 
purpose  of  taxation. 

However,  the  present  practice  that  is  most  favored  is  to 
endeavor  to  determine  as  near  as  possible  the  true  value. 

Thus  far  there  has  been  no  method  of  determining  mine  valua- 
tion for  purposes  of  state  and  county  taxation  that  has  been 
satisfactory  to  all  concerned,  due  to  the  fact  that  the  deter- 
mination of  the  actual  mine  property  value  is  a  matter  of 
great  difficulty  and  uncertainty,  requiring  expert  knowledge 
and  the  use  of  many  estimates  and  approximations  which  may 
not  prove  to  be  correct  in  the  end. 

Therefore,  some  states,  in  order  to  avoid  a  laborious  process 
of  valuation,  have  adopted  a  simple  method  of  capitalizing  the 
earnings  of  proven  mines  and  assessing  unproven  mines  a 
nominal  value  per  acre  of  mineral  ground — the  equipment  and 
personal  property  of  both  classes  of  mines  being  assessed  at 
cost,  less  a  reasonable  allowance  for  depreciation. 

I  am  of  the  opinion  that  such  a  method  could  be  made  uni- 
form for  all  states  and  counties  and  would  give  satisfactory 
results. 

Depletion  and  Depreciation 

When  such  a  method  is  used  the  mines  are  grouped  into  two 
classes,  productive  mines  and  non-productive  mines.  The 
tax  received  from  non-productive  mines  is  small,  which,  of 
course,  meets  with  the  general  approval  of  the  owners  of  such 
mines.  However,  in  the  case  of  productive  mines  the  value  of 
.the  mineral  ground  is  determined  by  taking  for  the  past  five 
years  the  average  operating  income  before  deduction  is  made 
for  depletion  and  depreciation,  and  capitalizing  this  average 
operating  income  at  a  certain  percentage,  according  to  the 
assured  life  of  each  mine,  as  shown  by  ore  reserves,  etc.,  the 
mines  being  grouped  as  follows: 


200        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

First — Mines  whose  ore  reserves  do  not  show  evidence  of 
exhaustion. 

Second — Mines  whose  ore  reserves  show  evidence  of  ex- 
haustion. 

Third — All  producing  mines  with  irregular  output. 

The  amount  of  the  first  group  is  capitalized  at  a  figure  sup- 
posed to  be  that  of  a  fair  profit  for  the  mining  business  as 
compared  with  other  industries  in  the  state.  The  amount  of 
the  second  group  is  capitalized  at  a  higher  figure;  while  the 
amount  of  the  third  group  is  capitalized  at  a  still  higher  figure, 
all  determined  with  the  endeavor  to  obtain  what  is  fair. 

Such  a  system  of  taxing  non-productive  and  productive 
mines  has  been  in  effect  for  a  number  of  years  in  the  State  of 
Arizona,  and  while  it  has  been  entirely  satisfactory  to  the 
state  and  counties  and  to  the  majority  of  non-productive 
mines,  it  has  resulted  in  making  the  producing  mines  pay 
about  60  per  cent,  of  the  state  and  county  taxes,  and  has  given 
other  lines  of  industry  a  lower  tax  rate  than  that  of  other 
states  of  much  larger  population  and  less  state  expense  than 
that  of  Arizona. 

Such  a  method  is  no  doubt  based  upon  the  right  principles 
and  has  the  advantage  of  simplicity  and  ease  of  operation; 
however,  it  has  its  disadvantages  as  well,  in  that  on  account 
of  the  difficulty  in  the  past  of  obtaining  net  earnings  the 
gross  earnings  have  been  taken  and  an  arbitrary  rate  of  capi- 
talization has  been  used  instead  of  a  return  equal  to  that 
earned  by  successful  concerns  in  other  lines  of  business.  This 
has  resulted  in  an  excessive  tax  on  the  producing  mines  of  the 
state. 

However,  this  system  was  possibly  the  best  that  could  be 
obtained  at  the  time  it  was  worked  out,  and  would  no  doubt 
be  as  near  an  ideal  system  as  could  be  obtained  if  the  follow- 
ing modifications  were  adopted : 

Modifications  Suggested 

First — To  include  in  the  productive  group  only  those  mines 
whose  net  value  of  the  total  ore  discoveries,  whether  mined  or 
in  place,  exceed  the  amount  of  the  actual  investment  in  mining 
claims,  equipment  and  development  expense. 

Second — All  mines  that  have  not  proven  their  investment, 
regardless  of  whether  or  not  they  are  marketing  ore  from 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     201 

development  work  or  are  mining  all  development  ore  discov- 
ered, should  be  included  in  the  non-productive  groups  and  the 
value  of  their  mine  property  so  assessed. 

Third — In  the  case  of  productive  mines,  instead  of  using  the 
average  operating  income  before  deduction  for  depletion  and 
depreciation  as  is  now  done,  there  should  be  used  the  net 
income  that  is  accepted  by  the  Federal  Government  as  income 
subject  to  income  taxes. 

Fourth — In  the  case  of  productive  mines  this  average  net 
income  should  be  capitalized  for  the  first  class  at  a  figure  not 
less  than  that  obtained  by  dividing  the  total  assessed  value  of 
stock  of  successful  commercial  enterprises  into  the  amount  of 
their  total  net  yearly  income.  In  no  case,  however,  should 
such  a  capitalized  value  exceed  the  present  worth  of  the  ore 
in  place  as  determined  by  methods  approved  by  the  Federal 
Government. 

Suggested  modifications  No.  1  and  No.  2  as  to  regrouping  of 
the  mines  are  matters  that  could  be  easily  accepted  and  would 
not  result  in  any  great  difference  in  the  state  and  county  taxes, 
but  would  be  of  great  advantage  to  those  engaged  in  the 
development  of  mines. 

Suggestion  No.  3,  to  use  net  income  instead  of  gross  income, 
also  could  be  easily  adopted  provided  the  development  mine  is 
eliminated  from  the  producing  group,  and  the  same  amount  of 
depreciation  and  depletion  as  allowed  by  the  Government 
would  be  deducted  by  the  state,  which  depletion  and  deprecia- 
tion deductions  previous  to  the  enactment  of  the  Federal 
income  tax  laws  were  practically  impossible  of  determination. 

The  reason  for  the  present  unfairness  in  the  state  and 
county  taxation  of  mines  when  the  average  income  is  capital- 
ized to  determine  valuation  is  due  to  the  capitalization  of  the 
average  gross  earnings  at  a  figure  equal  to  or  lower  than  that 
obtained  in  other  lines  of  business  on  net  earnings. 

As  an  illustration,  it  is  the  practice  of  most  merchants  so 
to  gauge  their  selling  prices  as  to  give  an  average  net  income 
of  from  5  to  10  per  cent,  of  the  sales  after  deduction  of  all 
expense,  including  cost  of  stock  and  depreciation  of  equipment, 
and  with  the  average  successful  merchant  the  turnover  of 
stock  is  from  two  to  four  times  per  year,  or  an  average,  say, 
of  7  per  cent,  on  sales  and  an  average  turnover  of  the  invest- 
ment of  three,  making  a  net  earning  of  about  21  per  cent,  on 
the  actual  investment,  on  which  investment  they  are  taxed. 


202        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

In  comparison  with  this,  under  the  Arizona  system  the 
average  earnings  of  the  first  class  of  mines,  which  are  taken 
before  any  deduction  is  made  for  the  cost  of  stock  and  depre- 
ciation of  equipment,  are  capitalized  at  15  per  cent. 

I  am  of  the  opinion  that,  could  the  present  Arizona  system 
of  determining  valuation  of  mines  be  modified  to  meet  the 
above  suggestions,  there  would  be  obtained  an  ideal  system 
of  valuation  for  state  and  county  taxation  of  mines,  which 
could  be  made  uniform  for  all  states  and  counties. 

Valuation  of  Mines 

In  order  that  it  may  be  known  when  a  discovery  of  a  mine 
is  made,  also  in  order  that  the  requirements  of  the  present 
Federal  Tax  law  as  to  the  determination  of  the  market  value 
of  mines  as  of  March  1,  1913,  in  case  of  purchase  prior  to  that 
date,  may  be  ascertained,  definite  methods  of  valuation  should 
be  approved  by  the  Treasury  Department,  which  would  also 
help  to  clear  up  the  matter  of  state  valuation  for  the  purpose 
of  taxation. 

In  order  to  decide  when  a  mine  has  been  discovered  or  when 
the  net  value  of  the  total  ore  discoveries  exceeds  the  invest- 
ment, there  must  be  determined  the  following  facts : 

(a)  The  total  dry  tonnage  of  commercial  ore  that  has  been 
discovered. 

(b)  The  commercial  mineral  contents  of  discovered  ore. 

(c)  The  recoverable  and  marketable  contents  of  the  ore. 

(d)  The  cost  of  recovery  and  marketing  the  recoverable 
contents. 

(e)  The  prices  to  be  received  for  the  recoverable  contents. 

Determining  Discovery 

These  facts  must  be  ascertained  before  it  can  be  known 
whether  or  not  a  discovery  of  a  mine  has  been  made,  and 
definite  methods  of  ascertaining  these  facts  should  be  decided 
upon  by  the  Treasury  Department,  especially  in  the  case  of 
determining  the  ore  reserves  and  what  metal  prices  are  to  be 
used. 

To  ascertain  the  value  of  a  mine  as  of  March  1,  1913,  or 
the  present  worth  as  of  any  certain  date,  for  the  purpose  of 
tax  valuation,  or  sale,  requires  the  use  of  two  aditional  factors,, 
as  follows : 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     203 

(f )  The  time  required  to  mine  and  market  the  ore. 

(g)  The  rate  of  interest  to  be  allowed  in  determining  the 
present  worth  of  the  mine  as  of  any  certain  date. 

These  factors  would  no  doubt  be  just  as  difficult  of  deter- 
mination as  factors  "A"  and  "E."  However,  they  are  matters 
that  must  be  settled  before  the  matter  of  depletion  can  be 
satisfactorily  determined  for  those  mines  that  had  acquired 
their  property  prior  to  March  1,  1913. 

The  determination  of  the  present  worth  of  a  mine  as  of  a 
certain  date  must  be  an  estimation  at  the  best,  due  to  the  fact 
that  it  is  an  endeavor  to  forecast  what  will  happen  in  the 
future  in  the  way  of  fluctuations  in  the  price  of  labor,  materials 
and  metal,  and  ability  to  operate  continuously,  etc.  Neverthe- 
less, there  should  be  some  equitable  method  of  determining 
present  worth  of  the  mineral  deposits  of  mines  adopted  imme- 
diately by  the  Federal  Government. 

Summary 

To  summarize  the  matters  that  have  been  covered  in  this 
address  concerning  State,  County  and  Federal  taxation  of 
mines,  I  will  say  that  the  mines  should  unite  for  their  mutual 
benefit  in  an  endeavor  to  obtain  the  following : 

First — To  get  the  State  and  Federal  Governments  to  define 
a  proven  mine  or  "Discovery  of  a  Mine"  as  the  discovery  of 
commercial  minerals,  whether  mined  or  in  place,  of  a  total  net 
value  in  excess  of  the  total  amount  of  the  investment  in  mining 
claims,  development  expense  and  equipment. 

Second — To  endeavor  to  get  the  State  and  Federal  Govern- 
ments to  decide  upon  a  definite  method  of  determining  the  net 
value  of  the  ore  discovered,  as  well  as  definite  methods  of 
ascertaining  the  present  worth  of  market  value  of  a  mine  as 
of  a  certain  date. 

Third — To  endeavor  to  have  the  Treasury  Department's 
Regulations  define  income  from  mines  subject  to  the  income 
tax  as  income  from  proven  mines  only. 

Fourth — To  endeavor  to  have  the  Treasury  Department's 
Regulations  define  income  from  mines  subject  to  excess  profits 
taxes  as  that  amount  of  each  year's  income  which  is  left  after 
the  average  investment  in  the  business  has  earned  at  least 
8  per  cent,  per  annum  for  each  year  of  the  investment,  i.  e., 
the  yearly  income  from  mining  operations  should  not  be  sub- 


204        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ject  to  excess  profits  tax  except  as  it  is  in  excess  of  an  amount 
necessary  to  give  an  earning  of  8  per  cent,  per  annum  on  the 
average  investment  to  date. 

State  and  County  Tax 

Fifth — For  the  purpose  of  state  and  county  taxes,  endeavor 
to  obtain  a  uniform  grouping  of  mines  of  each  state,  as 
follows : 

(a)  Non-productive  and  non-income-earning  properties; 

(b)  Producing  and  income-earning  properties ; 

and  to  divide  each  of  these  groups  into  sufficient  classes  to 
enable  the  placing  of  a  fair  valuation  on  each  class. 

Sixth — To  endeavor  to  obtain  for  the  purpose  of  state  and 
county  taxation  a  nominal  assessed  value  per  acre  of  all  non- 
productive and  non-income-earning  mines,  and  a  fair  valuation 
of  productive  and  income-earning  mines  by  means  of  capital- 
izing the  actual  net  income  as  reported  to  the  Federal  Govern- 
ment, at  a  rate  for  the  first  group  of  productive  mines  that  is 
not  less  than  a  rate  obtained  by  dividing  the  total  net  income 
by  the  total  assessed  value  of  the  investment  reported  to  the 
state  for  the  purpose  of  taxation  by  successful  commercial 
firms.  The  rates  for  the  other  classes  of  productive  mines  to 
be  capitalized  as  much  higher  than  the  first  class  as  fairness 
and  justice  will  allow. 

Seventh — That  to  take  care  of  the  extra  hazards  and  risks 
involved  in  bringing  the  mine  to  the  proven  stage,  as  well  as 
the  same  risks  and  hazards  that  must  continually  be  taken  in 
order  to  insure  the  continuation  of  the  business,  due  to  the 
fact  that  mining  is  a  wasting  industry,  there  should  be  granted 
either  a  higher  rate  of  income  exemption  from  the  excess  profits 
tax,  or  there  should  be  allowed  the  charging  up  as  expense  and 
setting  aside  as  "Reserve  for  Hazards"  an  amount  not  to 
exceed  10  per  cent,  of  the  yearly  expense  of  mining. 

There  are  other  matters  that  should  be  settled  which  have 
already  been  thoroughly  discussed,  such  as  methods  of  deter- 
mining invested  capital  and  of  figuring  depletion  and  depre- 
ciation, etc. 

In  order  to  accomplish  the  objects  as  above  set  forth,  there 
should  be  a  campaign  of  education  to  acquaint  the  general 
public  and  tax-law-making  bodies  of  the  inherent  difference 
between  mining  and  other  lines  of  business. 


PROTECTION  AGAINST  UNJUST  TAXATION  OF  MINES     205 

Mining  Differs  from  Other  Industries 

Most  everyone  who  is  acquainted  with  mining  knows  that 
the  hazard  and  risk  is  much  greater  than  in  other  lines.  How- 
ever, it  is  doubtful  whether  any  except  those  who  have  made 
it  a  study  could  tell  exactly  wherein  mining  differs  from  other 
industries,  of  which  the  principal  differences  are  as  follows : 

First — The  initial  investment  in  mining  claims,  development 
and  equipment  must  be  proven  by  the  discovery  of  commercial 
ore  of  a  net  value  equal  to  the  amount  of  investment  before 
the  investor  can  be  reasonably  assured  of  the  return  of  his 
capital,  which  will  then  be  dependent  only  upon  the  fluctuations 
in  the  metal,  material  and  labor  markets. 

In  other  lines  of  business  the  amount  of  investment  in  mer- 
chandise, raw  materials,  property,  etc.,  has  a  certain  market- 
able value  from  the  moment  of  purchase,  and  can  be  disposed 
of  at  any  time  thereafter  for  the  amount  of  capital  invested 
therein,  plus  a  reasonable  profit,  dependent  upon  fluctuations  in 
the  material  and  labor  markets  and  competition. 

Determining  Income 

Second — The  income  of  a  mine  is  determined  principally  by 
the  amount  that  the  net  value  of  the  ore  discovered  is  in 
excess  of  the  investment  in  mining  claims,  development  and 
equipment,  while  the  income  of  other  industries  is  determined 
by  the  price  at  which  the  article  can  be  sold  above  the  cost  of 
production  and  the  quickness  with  which  the  investment  is 
turned. 

Third — It  takes  from  three  to  seven  years,  as  a  rule,  after 
the  necessary  development  equipment  has  been  installed  on  a 
mineral  property  to  prove  the  value  of  the  property,  during 
which  time  the  investor  stands  to  lose  not  only  the  interest  on 
his  money,  but  all  or  part  of  his  principal,  depending  upon 
the  amount  of  the  net  value  of  the  commercial  ore,  if  any,  that 
may  be  discovered. 

Other  lines  of  industry  have  the  value  of  their  investment 
established  immediately  upon  the  acquisition  of  their  stock, 
and  are  able,  as  soon  as  equipment  necessary  to  handle  the 
business  can  be  installed,  to  offer  their  product  for  sale  at  as 
high  a  figure  above  the  investment  cost  as  competition  and 
the  law  of  supply  and  demand,  etc.,  will  allow. 


206        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Fourth — Mining  in  taking  the  risk  involved  in  proving  its 
initial  investment,  as  well  as  being  deprived  of  any  return  on 
its  investment  during  this  period,  besides  being  a  wasting 
industry,  must  obtain  a  higher  rate  of  income  after  the  mine 
has  been  proven  to  be  income-earning  property  than  is  obtained 
by  other  business  in  order  to  insure  before  exhaustion  the  same 
average  return  of  income  as  other  lines  of  industry. 

Exhausting  Reserves 

Fifth — To  operate  a  producing  mine  requires  extraction  of 
ore  and  sale  of  its  recoverable  contents,  which  eventually 
exhausts  the  property  of  all  commercial  contents.  Therefore, 
to  continue  the  life  of  the  business  and  keep  the  organization 
intact  requires  that  the  same  risk  and  uncertainty  and  delay 
in  return  on  investment  as  in  the  beginning  of  the  business 
must  again  be  taken  in  the  case  of  new  properties  before  the 
exhaustion  of  each  proven  property. 

In  the  case  of  other  lines  of  business  that  have  an  estab- 
lished trade  it  is  simply  a  question  of  reinvesting  the  liquidated 
capital  that  was  invested  in  stock  in  the  purchase  of  new  stock 
of  finished  or  raw  materials,  which  in  the  case  of  successful 
commercial  enterprises  is  done  three  or  more  times  during 
each  year's  operation  without  any  hazard  whatsoever. 

In  addition  to  the  main  points  set  forth  above,  mines  are 
rsubject  to  accidents  by  fire,  flood  and  cave-ins  of  greater 
•magnitude  than  in  the  case  of  other  lines  of  business,  which  at 
;times  result  in  an  operating  loss  even  after  the  mine  has  been 
proven  to  be  an  income-earning  property,  and  against  which 
there  is  no  insurance  except  in  the  case  of  accident  to  em- 
ployees. 

A  proven  property  has  not  only  to  assume  the  risks  and 
uncertainties  above  specified,  which  are  not  assumed  by  other 
lines  of  business,  but  must  also  bear  the  risks  common  to  all 
business  of  fluctuations  in  the  price  of  materials,  wages  of 
labor  and  cost  of  supplies,  as  well  as  strikes  and  acts  of  nature, 
which  at  times  may  result  in  a  proven  mine  operating  at  a  loss 
for  any  one  period. 


INCOME  TAX  AS  APPLIED  TO  MINES  20T 


FEDERAL  INCOME  AND  PROFITS  TAXES  AS  APPLIED 

TO  MINES 

MR.  A.  P.  RAMSTEDT,  Comptroller,  Herculese  Mining  Company, 
Wallace,  Idaho 

The  subject,  "Federal  Income  and  Profits  Taxes  As  Applied 
to  Mines,"  embraces  some  of  the  most  important  problems  now 
confronting  the  mining  industry,  and  the  difficulties  encoun- 
tered in  applying  the  Federal  revenue  laws  to  mines  and  other 
wasting  industries  have  given  the  Commissioner  of  Internal- 
Revenue,  as  well  as  taxpayers,  much  concern. 

The  taxes  on  incomes  and  profits  are  so  heavy  that  we  all 
feel,  as  never  before,  the  necessity  for  applying  sound  financial 
methods,  as  far  as  possible,  in  computing  the  tax  liability. 

The  Revenue  Act  of  1917  was  a  conglomeration  of  ideas, 
thrown  together,  it  seems,  without  regard  for  the  elementary 
principles  of  taxation  and  so  loosely  as  to  require  strong-arm 
and  arbitrary  administration  to  make  it  workable  at  all.  We 
have  been,  and  are  now,  ready  and  willing  to  accept  this 
product  in  view  of  the  extraordinary  requirements  incident  to 
winning  the  great  war,  but  we  have  a  right  to  expect  that  in 
this  necessary  strong-arm  and  arbitrary  administration  all 
taxpayers  be  treated  fairly,  so  far  as  possible.  The  Revenue 
Act  of  1918  is  a  much  better  law,  but  still  presents  its  problems, 
especially  when  applied  to  mines  and  other  so-called  wasting 
industries. 

In  this  discussion  I  assume  that  the  taxpayer  and  the  tax 
collector  are  honest.  I  have  no  patience  with  the  man  who 
tries  to  evade  a  just  tax,  and  I  have  no  patience  with  a  tax 
collector  who  tries  to  exact  an  unfair  tax  simply  because  he  is 
able,  through  some  technicality,  to  extract  from  a  taxpayer 
more  than  that  taxpayer's  just  share. 

It  has  been  my  experience  in  connection  with  the  adminis- 
tration of  Federal  tax  laws,  as  well  as  state  and  municipal  tax 
laws,  that  instances  of  willful  attempts  at  tax  evasion  are  rare. 
There  are  often  honest  differences  of  opinion  as  to  what  the 
tax  should  be,  especially  under  the  Federal  income  and  profits 
tax  laws,  but,  as  a  general  rule,  the  taxpayer  is  honest,  and  this, 
applies  to  the  miner  as  well  as  to  other  taxpayers. 


208        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Two  Major  Problems 

In  applying  the  Federal  income  and  profits  tax  laws  to  the 
mining  industry,  we  are  at  once  confronted  with  two  major 
problems,  viz :  The  valuation  of  the  mineral  property  for  the 
purpose  of  computing  the  depletion  allowance,  and  the  valuation 
of  the  same  property  for  the  purpose  of  invested  capital.  I 
shall  confine  my  discussion  to  these  two  major  problems, 
assuming  that  we  are  all  familiar  with  the  general  provisions 
of  the  law  and  with  the  fundamentals  of  mining  economics. 

The  first  of  the  two  problems  referred  to  is  an  income  tax 
problem  primarily,  involving  in  the  case  of  mineral  properties 
acquired  by  the  taxpayer  prior  to  March  1,  1913,  the  deter- 
mination of  the  fair  market  value  of  such  property  (or  the  tax- 
payer's interest  therein)  on  that  date,  and  involving  in  the  case 
of  mines  discovered  by  the  taxpayer  on  or  after  March  1,  1913, 
and  not  acquired  as  the  result  of  purchase  of  a  proven  tract  or 
lease,  where  the  fair  market  value  of  the  property  is  materially 
disproportionate  to  the  cost,  the  fair  market  value  of  the  prop- 
erty at  the  date  of  the  discovery,  or  within  thirty  days  there- 
after. 

As  the  value  of  the  property  depends  upon  eventual  earnings, 
the  first  step  in  arriving  at  the  value  at  a  specified  date  is  to 
determine  the  eventual  earnings  based  upon  the  value  of  the 
metallic  content  and  operating  costs  under  normal  conditions 
as  of  that  date,  eliminating,  as  I  understand  it,  fluctuations  in 
either  the  prices  of  metals  or  the  costs  of  operation. 

Determining  Earnings 

It  has  been  suggested  that,  in  determining  the  earnings  to  be 
realized  eventually,  consideration  be  given  to  the  trend  of  the 
selling  prices  of  the  product.  If  variations  in  prices,  costs  and 
output  could  be  determined  to  a  reasonable  certainty,  it  would 
no  doubt  be  proper  to  take  such  variations  into  account,  but, 
as  a  general  rule,  the  prospective  net  earnings  must  be  deter- 
mined in  consideration  of  the  facts  that  were  known  or  could 
have  been  known  at  the  specified  date  of  valuation.  In  order 
to  be  in  harmony  with  the  underlying  principles  for  determin- 
ing gains  or  losses,  we  must  eliminate  from  our  estimate  of 
eventual  earnings  any  speculative  value  and  any  estimated 
appreciation  to  be  realized  or  any  anticipated  loss  to  be  sus- 
tained on  the  sale  of  the  product.  In  other  words,  the  earn- 


INCOME  TAX  AS  APPLIED  TO  MINES  209 

ings  to  be  realized  eventually,  as  estimated  at  a  specified  date, 
are  the  earnings  that  would  have  been  realized  on  that  date  in 
the  event  that  all  of  the  ore  could  on  that  date  have  been 
extracted,  treated  and  marketed  under  the  normal  costs  and 
selling  prices  then  prevailing. 

The  eventual  earnings,  determined  as  aforesaid,  should  be 
reasonably  certain  of  realization,  i.  e.,  extraordinary  uncer- 
tainty as  regards  ore  supply  should  be  allowed  for  in  the  esti- 
mate of  eventual  earnings,  so  that  in  reducing  the  eventual 
earnings  to  a  value  as  of  a  specified  date  such  uncertainty  may 
not  be  considered  in  determining  the  interest  rate  to  be  applied. 

Having  determined  to  a  reasonable  certainty  the  amount  of 
eventual  earnings  to  be  realized  annually  over  the  period  of 
years  found  by  dividing  the  total  number  of  units  in  the  mine 
by  the  number  of  units  to  be  annually  extracted  and  marketed 
under  ordinary  conditions,  there  is  no  sound  reason  for  apply- 
ing a  higher  rate  in  reducing  such  annual  earnings  to  a  value 
as  of  a  specified  date  than  would  be  applied  in  determining  the 
present  worth  of  an  annuity. 

Hazard  to  Be  Considered 

It  is  true  that  the  miner  cannot  insure  himself  against  the 
hazards  attendant  on  the  extraction  of  his  ore,  but  that  fact 
does  not  justify  the  employment  of  a  higher  rate  in  reducing 
his  eventual  earnings  to  present  worth.  The  employment  of  a 
"high  rate  of  interest  return  results  in  the  computation  of  low 
valuation,  hence  low  depletion  allowance,  and  consequently, 
high  tax;  and  then  instead  of  deducting  from  income  his 
heavy  insurance  expense,  much  heavier  than  in  most  other 
industries,  the  miner  pays  tax  on  it  as  if  it  were  true  profit," 
as  has  recently  been  so  well  pointed  out  by  Dr.  Graton,  valua- 
tion engineer  of  the  recently  established  Sub-division  of 
Natural  Resources  of  the  Income  Tax  Unit  of  the  Bureau  of 
Internal  Revenue. 

Hazard  is  an  element  that  should  not  be  ignored,  in  the  event 
that  it  would  be  possible  to  properly  allow  for  it  under  existing 
laws.  If  insurance  against  the  losses  peculiar  to  mining  could 
be  purchased,  the  miner  could,  under  existing  laws,  include  the 
insurance  premium  as  business  expenses,  as  is  permitted  in 
the  case  of  any  other  business.  However,  no  insurance  concern 
will  write  such  insurance,  and  the  miner  must  carry  the  insur- 


210         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ance  himself.  Allowance  for  this  insurance  expense  should  be 
made,  not  in  the  rate  to  be  applied  in  determining  the  present 
worth  of  his  eventual  earnings,  but  in  the  form  of  a  deduction 
from  gross  income,  and  the  law  should  be  so  amended  as  to 
provide  in  the  future  for  such  deduction  according  to  the 
peculiar  conditions  in  each  case,  as  for  example  in  the  case  of 
a  coal  or  iron  mine  as  distinguished  from  an  oil  or  gas  well  or 
a  non-ferrous  metal  mine. 

Flat  Rate  Suggested 

It  has  been  suggested  that  in  the  administration  of  existing 
laws  a  flat  rate  on  the  entire  initial  capital  returnable  through, 
depletion  allowances  might  be  applied  throughout  the  entire 
life  of  the  mine,  in  reducing  eventual  earnings  to  present  worth, 
notwithstanding  the  fact  that  such  capital  is  continually  being 
reduced  by  the  annual  depletion  allowances.  It  is  said  in  favor 
of  this  method  that  "since  the  money  still  in  the  enterprise 
derives  greater  and  greater  interest  return  with  time,  it  could, 
therefore,  afford  to  carry  greater  risk  during  the  late  than  in 
the  early  period  of  the  investment."  It  seems  to  me  that  the 
employment  of  this  method  to  determine  present  value,  which 
operates  to  reduce  the  initial  capital  returnable  through  deple- 
tion allowance,  introduces  for  consideration  in  this  matter  the 
very  element  which  distinguishes  an  industry  of  wasting 
resources  from  an  ordinary  business  enterprise. 

The  present-value-of-eventual-earnings  method  is  unques* 
tionably  the  recognized  method  for  determining  the  value  of  a 
mining  property.  Nevertheless,  no  hard  and  fast  rule  or 
formula  can  be  laid  down  for  the  application  of  this  method^ 
on  account  of  the  distinct  conditions  peculiar  to  each  case.  In 
determining  what  particular  formula  to  apply  and  what  factors 
to  employ  in  a  given  case,  due  consideration  must  be  given  to 
the  history  of  the  district  wherein  the  property  is  located,  the 
history  of  the  mine  in  question,  the  grade  and  quantity  of  ore, 
the  probable  life  of  the  mine,  the  rate  of  development,  the  stage 
of  the  operating  life,  and  other  conditions  surrounding  the 
property  to  be  valued.  As  stated  before,  extraordinary  uncer- 
tainty as  regards  ore  supply  should  be  allowed  for  in  esti- 
mating the  eventual  earnings,  and  thus  be  eliminated  from  con- 
sideration in  determining  what  rate  to  apply  in  reducing  such 
eventual  earnings  to  a  value  at  a  specified  date. 


INCOME  TAX  AS  APPLIED  TO  MINES  211 

Local  Conditions  Should  Control 

The  proper  unit  to  be  adopted  in  calculating  the  depletion 
allowance  will  also  depend  upon  the  peculiar  conditions  sur- 
rounding the  property.  In  a  case  where  the  strength  of  min- 
eralization is  constant  throughout  the  entire  ore  body,  it  may 
be  entirely  proper  to  adopt  the  ton  of  ore  extracted  as  the  unit. 
Where,  however,  the  strength  of  mineralization  changes,  as 
for  example  in  a  case  where  the  ratio  of  the  metallic  content  to 
the  quantity  of  ore  broken  decreases  with  depth,  some  other 
unit  such  as  pound  or  ounce  of  metal  or  dry  ton  of  shipping 
product  should  be  adopted,  otherwise  the  ratio  of  depletion 
allowance  to  value  of  ore  would  increase  as  the  strength  of 
mineralization  decreases,  and  vice  versa.  The  unit  of  metal 
might  well  be  employed  in  the  case  where  only  one  metal  is 
mined,  as  for  example  in  the  Missouri  lead  mines,  but  could 
hardly  be  employed  in  the  cases  where  ores  contain  two  or  more 
metals  of  inconstant  ratio  to  one  another,  as  in  the  case  of  the 
complex  ores  of  the  Coeur  d'Alenes  in  Idaho.  In  that  district 
the  ores  are  concentrated  to  about  the  same  value  per  ton  of 
shipping  product  on  account  of  transportation  charges  and  for 
convenience  in  smelting,  so  that  in  the  case  of  a  mine  in  that 
district  the  dry  ton  of  shipping  product  would  appear  to  be 
the  fairest  unit  to  adopt. 

Invested  Capital 

The  second  of  the  two  major  problems  encountered  in  apply- 
ing the  Federal  income  and  profits  tax  laws  to  the  mining  in- 
dustry is  the  valuation  of  the  mineral  property  for  the  purpose 
of  invested  capital. 

Under  the  Revenue  Act  of  1917,  invested  capital  means  sub- 
ject to  certain  limitations  in  the  case  of  a  corporation  or  part- 
nership : 

"(1)  Actual  cash  paid  in;  (2)  the  actual  cash  value  of  tangible 
property  paid  in  other  than  cash  for  stock  or  shares  in  such  corporation 
or  partnership  at  the  time  of  such  payment  (but  in  case  such  tangible 
property  was  paid  in  prior  to  January  1,  1914,  the  actual  cash  value  of 
such  property  as  of  January  1,  1914,  but  in  no  case  to  exceed  the  par 
value  of  the  original  stock  or  shares  specifically  issued  therefor),  and 
(3)  paid  in  or  earned  surplus  and  undivided  profits  used  or  employed  in 
the  business,  exclusive  of  undivided  profits  earned  during  the  taxable 
year"— 


212        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

omitting  here  the  provisions  relating  to  patents,  copyrights,, 
good  will  and  other  intangible  property ;  and  means  in  the  case 
of  an  individual — 

"(1)  Actual  cash  paid  into  the  trade  or  business,  and  (2)  the  actual 
cash  value  of  tangible  property  paid  into  the  trade  or  business,  other  than 
cash,  at  the  time  of  such  payment  (but  in  case  such  tangible  property 
was  paid  in  prior  to  January  1,  1914,  the  actual  cash  value  of  such  prop- 
erty as  of  January  1,  1914),  and  (3)  the  actual  cash  value  of  patents, 
copyrights,  good  will,  trade  marks,  trade  brands,  franchises  or  other 
intangible  property,  paid  into  the  trade  or  business  at  the  time  of  such 
payment,  if  payment  was  made  therefor  specifically  as  such  in  cash  or 
tangible  property,  not  to  exceed  the  actual  cash  or  actual  cash  value  of 
the  tangible  property  bona  fide  paid  therefor  at  the  time  of  such  pay- 
ment." 

These  provisions  of  the  law,  standing  alone,  are  not  clear,, 
but  appear  to  be  broad  enough  to  permit  of  including  as 
invested  capital  the  full  known  value  of  an  ore  body  at  the  time 
paid  in,  less  actual  depletion  sustained  and  not  covered  by 
depletion  reserve.  Article  63  of  Regulations  No.  41,  relating 
to  the  excess  profits  tax  of  1917,  clears  up  this  point  so  far 
as  a  corporation  or  a  partnership  is  concerned,  by  treating  the 
known  value,  as  at  the  date  of  conveyance,  in  excess  of  the  cash 
or  the  par  value  of  the  stock  or  shares  paid  therefor,  as  paid  in 
surplus,  and  applies,  as  I  understand  it,  whether  the  surplus 
was  paid  in  before  or  after  January  1,  1914.  The  situation  is 
practically  covered  in  the  case  of  an  individual  by  the  law  itself. 

It  is  my  understanding  that  Article  55  of  said  regulations 
No.  41,  which  provides  that  tangible  property  paid  in  for  stock 
prior  to  January  1,  1914,  must  be  valued  at  either  (a)  the 
actual  cash  value  of  such  property  on  January  1,  1914,  or  (b) 
the  par  value  of  the  stock  or  shares  specifically  issued  therefor, 
whichever  is  lower,  relates  only  to  a  case  wherein  the  known 
value  of  the  property  at  the  time  acquired  prior  to  January  1, 
1914,  was  less  than  the  par  value  of  the  stock  or  shares  specifi- 
cally issued  therefor.  In  such  a  case  this  article  makes  clear 
the  fact  that  the  law  allows  actual  appreciation  in  value 
between  the  date  the  property  was  paid  in  and  January  1,  1914, 
up  to  the  par  value  of  the  stock  or  shares  specifically  issued  in 
exchange  for  such  property.  This  interpretation  of  Article  55 
is  entirely  consistent  with  Article  63  of  said  Regulations  No. 
41,  and  brings  the  Revenue  Act  of  1917  into  line  with  the 
Revenue  Act  of  1918  so  far  as  the  point  herein  raised  is 
concerned.  On  the  other  hand,  any  interpretation  applying 
said  Article  55  to  a  case  wherein  the  known  value  of  the  prop- 


INCOME  TAX  AS  APPLIED  TO  MINES  213 

erty  at  the  time  acquired  prior  to  January  1,  1914,  exceeded 
the  par  value  of  the  stock  or  shares  specifically  issued  therefor 
would,  of  course,  be  inconsistent  with  Article  63,  above  referred 
to,  the  adopted  form  on  which  to  make  the  return,  and  would 
be  out  of  line  with  the  definition  of  invested  capital  under  the 
Revenue  Act  of  1918. 

Difficult  Problems 

In  this  discussion  I  have  assumed  that  the  assessments 
which  have  been  made  will  be  finally  determined  under  existing 
laws.  I  realize  fully  that  the  problems  confronting  the  Revenue 
Bureau  in  the  administration  of  such  laws  when  applied  to  the 
mining  industry  are  exceedingly  difficult  of  solution ;  neverthe- 
less, I  am  unalterably  opposed  to  any  retroactive  legislation 
which  will  affect  the  taxes  already  levied.  The  Revenue  Act  of 

1917,  in  particular,  and  to  a  lesser  degree  the  Revenue  Act  of 

1918,  contain  provisions  that  are  not  only  senseless  but  unjust 
when  applied  to  special  cases.    Notwithstanding  that  fact,  it 
is  my  firm  belief  that  needed  relief  in  special  cases  had  better 
be  given-  by  arbitrary  administration  of  existing  law  than  by 
continuing  the  recent  practice  of  enacting  retroactive  tax  laws. 
The  business  of  this  country  accepted  the  enormous  burden 
imposed  by  the  Revenue  Act  of  1917  without  complaint;  it 
stood  for  the  Revenue  Act  of  1918,  which  not  only  increased 
the  annual  tax  burden  but  imposed  that  burden  by  a  law 
enacted  more  than  a  year  after  it  became  effective.    Let  us  hope 
that  the  laws  which  have  imposed  taxes  on  practically  every 
business  enterprise  so  high  that  they  have  become  the  eon- 
trolling  factor  governing  future  operations  may  not  again  be 
changed  by  enacting  retroactive  legislation.     The  mining  in- 
dustry, in  common  with  other  business,  must  know  in  advance, 
approximately,  at  least,  what  its  tax  liability  is  to  be,  if  it  is  to 
survive,  and  it  is  entitled  to  have  its  tax  liability  finally  deter- 
mined by  competent  authority  within  a  reasonable  time.  Large 
sums  of  money,  which  should  be  expended  in  development,  are 
now  being  held  in  reserve  to  meet  contingencies  incident  to 
unsettled  tax  questions.    It  is  a  matter  of  vital  importance  that 
these  questions  be  settled,  and  the  tax  liabilities  determined 
with  finality,  so  that  the  moneys  now  held  in  such  reserve  may 
be  released  into  the  channels  of  trade  and  commerce  during 
this  period  of  reconstruction. 


214        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

PROBLEMS  OF  THE  OIL  INDUSTRY 

By  RALPH  ARNOLD,  of  New  York  and  Los  Angeles 

Consulting  Petroleum  Engineer,  U.  S.  Bureau  of  Mines;  formerly 
Geologist,  U.  S.  Geological  Survey,  and  Chief,  Oil  and  Mine  Section, 
Internal  Revenue  Bureau. 

Mining  for  oil  and  gas  is  so  different  from  mining  for  metals 
and  coal  that  it  oif  ers  many  unique  problems,  and  has  devel- 
oped into  such  a  great  industry  that  its  operators  have  seen 
fit  in  many  instances  to  maintain  exclusive  organizations.  The 
divergence  between  these  two  branches  of  mining  and  the 
unison  of  interests  between  all  petroleum  and  natural  gas 
operators  offers  certain  justification  for  this  action.  Person- 
ally, however,  I  should  like  to  see  more  co-operation  between 
all  of  the  mining  industries  of  the  country  for  many  very 
obvious  reasons,  and  I  sincerely  hope  that  the  officials  of  The 
Mining  Congress  will  continue  their  efforts  to  bring  as  many 
oil  operators  into  this  organization  as  is  possible.  A  closer 
co-operation  between  The  Mining  Congress  and  The  American 
Petroleum  Institute  would  also  be  mutually  advantageous. 
The  shale  oil  industry,  involving  mining  incident  to  the  re- 
covery of  liquid  petroleum,  may  furnish  the  tie  that  will 
eventually  bind  the  two  branches  of  the  industry  more  closely 
together. 

As  miners,  you  are  directly  interested  in  petroleum  because 
it  gives  you  your  gasoline  and  distillates  for  motor  transporta- 
tion and  power  purposes ;  it  gives  you  your  kerosene  for  illumi- 
nation; it  lubricates  your  machinery;  it  surfaces  your  high- 
ways; and,  finally,  it  furnishes  you  the  most  conveniently 
transported  and  utilized  of  all  fuels — fuel  oil  and  natural  gas. 
Furthermore,  as  Americans,  you  are  all  interested  in  the 
petroleum  industry  because  it  is  one  of  those  absolutely  essen- 
tial to  our  civilization  and  our  national  existence. 

Two  great  problems  confront  the  American  oil  industry 
today :  First,  the  source  of  the  future  supply  of  crude  oil ;  and, 


PROBLEMS  OF  THE  OIL  INDUSTRY  215 

second,  how  to  operate  profitably  under  the  enormous  burden 
of  present  high  taxes  and  high  cost  of  production. 

Our  Past  Record  and  Present  Status 

The  United  States  has  maintained  a  dominant  position  in 
the  oil  industry  of  the  world  ever  since  it  began  producing 
petroleum  on  a  commercial  basis  in  the  late  fifties.  It  has  done 
this  mainly  because  the  United  States  originally  contained 
more  oil  than  most  of  the  other  countries  of  the  world  com- 
bined, and  because  those  originally  at  the  head  of  the  industry 
were  men  of  foresight  and  aggressiveness,  who  knew  how  to 
produce  the  oil  and  how  to  sell  it.  These  men,  who  advanced 
the  industry  to  the  position  in  which  we  see  it  today,  were 
able  to  secure  all  of  the  crude  oil  they  needed  for  every  pur- 
pose by  seeking  after  it  in  the  fields  of  our  own  country;  and 
this  condition  had  prevailed  almost  without  intermission  up 
to  the  beginning  of  the  great  war.  But  as  far  back  as  1914 
some  who  were  studying  the  situation  interpreted  the  fact 
that  production  was  not  keeping  pace  with  consumption  as 
meaning  that  our  oil  resources  were  becoming  exhausted. 
Inventories  of  our  oil  reserves  undertaken  by  various  authori- 
ties indicated  that  only  five  to  seven  billion  barrels  of  oil  re- 
mained available  in  our  fields.  Estimates  during  the  past  year 
tend  to  reduce,  rather  than  increase,  original  estimates. 
Whether  or  not  the  reserves  are  five  or  seven  billion  barrels, 
or  whether  it  will  take  sixteen  or  twenty-two  years  to  exhaust 
the  supply  at  the  present  rate  of  consumption,  it  is  an  indis- 
putable fact  that  we  must  find  new  sources  for  our  supply  or 
lose  control  of  the  world's  petroleum  industry  so  long  held  by 
this  country. 

We  are  using  about  a  million  barrels  of  oil  daily,  and  are 
drawing  on  reserves  above  ground  at  the  rate  of  25,000,000 
barrels  yearly  and  importing  large  quantities  from  Mexico 
besides  in  order  to  supply  this  demand.  All  of  our  important 
fields  are  over  the  peak  of  their  production  and  started  on  the 
down  grade  with  the  exception  of  Texas,  Louisiana  and 
Wyoming.  New  demands  are  being  made  on  the  market  every 
day  through  the  increased  use  of  machinery,  especially  internal 
combustion  engines  for  transportation  and  farm  service,  and 
new  uses  for  oil. 


216        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Millions  are  being  expended  monthly  in  prospecting  for  new 
territory  within  the  United  States  with  only  mediocre  suc- 
cess— not  enough  new  production  brought  in  to  even  meet  the 
decrease  in  the  old  fields,  let  alone  the  growing  demand.  Only 
recently  it  was  heralded  about  that  the  new  fields  in  Northern 
Texas  would  more  than  meet  the  new  demands.  But  what  do 
we  find  on  examination?  Simply  a  wide  territory — a  vast 
territory,  if  you  please — deep  and  expensive  to  drill,  the  wells 
of  which  produce  the  great  bulk  of  the  oil  in  the  first  few 
months  of  their  life;  and  at  another  place,  a  limited  area, 
divided  into  holdings  of  such  small  size,  and  each  property 
being  operated  so  intensively  as  to  make  for  a  practical 
exhaustion  of  this  rich  territory  within  a  year  or  two. 

I  am  voicing  no  new  sentiment  when  I  say  the  situation  is 
not  only  serious  but  desperate.  However,  I  want  to  reiterate 
it  here  and  assure  you  that  it  represents  the  opinion  not  only 
of  the  geologists,  who  were  first  to  call  attention  to  our  waning 
resources,  but  of  the  conservative  operators  as  well.  Even  the 
optimists  among  the  oil  fraternity — meaning  the  users  of 
crude  oil,  such  as  refiners  and  marketers — are  beginning  to 
see  the  "hole  in  the  doughnut,"  which  up  to  the  present  time 
has  always  been  supposed  to  be  reserved  for  the  special  edifica- 
tion of  the  producer.  When  this  country  loses  its  position  as 
the  chief  producer  of  oil  it  loses  its  commercial  supremacy, 
and  with  this  world  leadership  in  many  things. 

But,  now  that  we  know  our  precarious  position,  what  can 
we  do  to  remedy  it? 

Solutions  for  Our  Predicament 

Three  solutions  offer  themselves,  and  without  doubt  we  will 
have  to  resort  to  all  immediately  in  order  to  meet  the  situa- 
tion. These  are:  Conservation  of  present  supply;  develop- 
ment of  oil  shale  industry,  and  seeking  of  new  fields  in  foreign 
countries. 

Conservation — First,  we  should  double  our  efforts  along  the 
lines  of  conservation  in  utilization.  Use  natural  gas  only  for 
domestic  purposes;  except  in  unusual  cases,  discontinue  the 
use  of  oil  in  any  but  internal  combustion  engines  (which  give 
three  or  four  times  the  efficiency  that  is  derived  through 


PROBLEMS  OF  THE  OIL  INDUSTRY  217 

burning  the  oil  under  boilers) ;  and  practice  the  use  of  sub- 
stitutes for  many  of  the  things  for  which  oil  is  now  used. 
The  normal  increase  in  the  price  of  oil,  due  to  the  excess  of 
demand  over  supply,  will  automatically  decrease  its  use  in 
some  cases. 

Shale  Oil  Industry — Second,  we  should  develop  our  shale  oil 
industry  as  soon  as  commercially  successful  methods  are 
found  for  the  utilization  of  the  vast  deposits  of  this  wonderful 
natural  asset.  According  to  the  statements  recently  made 
at  the  meeting  of  the  Shale  Oil  Section  of  The  Mining  Con- 
gress, such  methods  are  known  and  are  awaiting  only  the 
advent  of  courageous  capital  before  giving  us  a  new  source  for 
oil.  But  this  industry  cannot  be  developed  overnight,  for  the 
capital  required  for  equipment  and  operation  and  the  time 
necessary  for  the  perfection  and  installation  of  the  machinery 
used  in  the  recovery  of  the  oil  place  real  assistance  from  this 
source  well  into  the  future.  But  we  must  utilize  our  shales 
and  do  it  as  quickly  as  prudence  will  permit. 

Foreign  Sources  of  Supply — Third,  we  should  seek  foreign 
sources  of  crude  oil.  This  last  alternative  reminds  the  writer 
that  he  discussed  this  subject  before  The  Mining  Congress  in 
1916.  Much  has  developed  since  that  date,  so  he  is  going  to 
presume  to  bring  that  discussion  up  to  date.  Where  are  the 
most  promising  areas  for  exploration  and  exploitation? 

Wonderful  Mexican  Field 

Our  thoughts  first  turn  to  Mexico.  A  wonderful  field, 
capable  today  of  yielding  enough  oil  to  supply  the  whole 
demand  of  the  United  States  and  possibly  the  world.  But  with 
all  this,  the  future  of  the  Mexican  fields  is  the  big  enigma  in 
the  oil  industry  of  the  world.  The  large  present  production 
coming  from  a  comparatively  few  enormous  "gushers"  does 
not  offer  the  security  that  would  result  were  the  same  pro- 
duction to  come  from  a  great  number  of  small  wells.  Take  the 
case  of  the  great  Potrero  del  Llano,  No.  4,  of  the  Aguila 
Petroleum  Company,  which  inside  of  48  hours  recently  changed 
from  a  production  of  35,000  barrels  daily  of  pure  oil  of  refining 
grade  to  a  spouter  of  useless  boiling  hot  salt  water.  Other 
wells  have  had  similar  endings,  and  the  same  fate  awaits  all 
the  wells  producing  under  the  unique  conditions  surrounding 


218        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

production  in  Mexico.  When  will  the  principal  fields  in  Mexico 
go  to  water? — that  is  the  one  big  question.  This  field,  there- 
fore, faces  an  uncertain  future,  and  bold  indeed  is  he  who  will 
predict  definitely  under  such  conditions.  But  there  are  so 
many  separate  proven  pools  in  the  field  and  so  much  untested 
territory  that  it  is  safe  to  assume  a  life  of  several  if  not  many 
years  for  the  field  as  a  whole.  Then  there  is  the  political 
situation  in  Mexico,  which,  largely  due  to  our  own  fault,  is  a 
constant  menace  to  the  oil  fields  of  that  country. 

Although  Canada  produces  but  a  small  quantity  of  refining 
oil,  it  offers  the  possibility  of  some  time  becoming  a  large  pro- 
ducer. Large  areas  exhibiting  certain  favorable  indications 
exist  in  Alberta  and  Saskatchewan,  but  some  of  these  are  so 
far  removed  from  adequate  transportation  facilities  as  to  be 
negligible  for  some  little  time  to  come.  Developments  now 
under  way  will  doubtless  furnish  considerable  light  on  the 
ultimate  productive  capacity  of  this  country  before  the  close 
of  1920. 

Central  America  and  the  West  Indies  offer  little  encourage- 
ment for  important  deposits,  and  only  reasonably  favorable 
indications  for  minor  fields. 

South  America,  in  addition  to  producing  several  million  bar- 
rels yearly,  offers  unusual  indications  of  some  rich  fields.  In 
order  of  their  present  yield  Peru  leads,  with  Argentina  second ; 
but  this  soon  will  be  changed  to  Venezuela  or  Colombia  first, 
with  Peru,  Argentina  and  Ecuador  trailing,  probably  in  the 
order  named.  Many  portions  of  this  vast  continent  are  yet 
untested  by  the  drill,  but  the  geologic  evidence  is  almost  con- 
clusive that  outside  the  countries  mentioned  little  petroleum 
exists. 

Of  the  Western  European  countries  Galicia,  Rumania  and 
Italy  are  the  most  promising.  The  first  two  contributed  very 
materially  to  the  world's  supply  before  the  war,  but  were 
terribly  crippled  by  the  contending  forces  during  the  course 
of  the  hostilities.  Now  development  and  rehabilitation  may 
bring  these  fields  to  near  their  old  standard,  while  careful 
prospecting  may  bring  to  light  some  more  small  fields  in  Italy. 
Recent  exploratory  drilling  in  England  has  not  resulted  satis- 
factorily, probably  due  to  the  absence  of  proper  reservoir 


PROBLEMS  OF  THE  OIL  INDUSTRY  219 

rocks  in  formations  which  otherwise,  especially  as  to  structure, 
are  favorable  for  oil  accumulation.  Alsace  produces  some  oil, 
but  outside  of  this  neither  the  balance  of  France  nor  any  of 
the  other  countries  offer  promise  of  commercial  fields. 

Southern  and  Central  Africa  offer  little  hope  for  commercial 
wells.  Northern  Africa,  especially  Algeria  and  Egypt,  are 
likely  to  become  reasonably  important  producers.  The  western 
coast  of  Africa  is  practically  unexplored,  so  may  conceal  some 
favorable  area. 

Australia  offers  no  hope  for  oil.  New  Zealand  produces  a 
little,  but  will  never  be  a  factor  in  the  world's  supply. 

Eastern  Asia,  with  the  possible  exception  of  Siberia,  is  prob- 
ably devoid  of  any  but  locally  important  fields,  as  are  also  the 
small  East  Indian  islands. 

Supply  from  Orient 

The  Dutch  East  Indies,  including  Borneo,  Sumatra  and  Java, 
are  the  only  important  sources  of  oil  in  the  Orient.  Their  oil 
is  controlled  by  the  Dutch  Shell  Company.  Japan  has  an 
appreciable  production  (over  3,000,000  barrels),  and  Formosa 
yields  small  quantities,  but  neither  will  probably  attain  an 
important  position  in  the  world's  markets.  The  Philippines 
offer  some  favorable  evidence  of  high-grade  oil,  and  develop- 
ments now  initiated  may  soon  determine  their  possibilities, 
which  at  most  will  never  be  very  great. 

The  important  production  of  the  future  will  come  from  the 
belt  of  fields  beginning  with  Egypt  on  the  south  and  extending 
through  Palestine,  Mesopotamia,  Persia,  and  thence  northward 
into  South  Central  Russia.  Several  of  these  fields  have  been 
operated  for  years,  some  are  comparatively  new,  and  one  in 
particular,  Persia,  has  made  a  phenomenal  record  only  re- 
cently. Some  are  practically  untouched,  but  all  yield  conclu- 
sive evidence  of  great  potentialities. 

Control  of  Future  Reserves 

From  the  American  viewpoint,  the  most  serious  question 
which  can  be  asked  regarding  the  countries  of  great  petroleum 
potentialities  is :  Who  owns  or  controls  them  ? 

To  Chester  Naramore,  who,  as  Chief  Petroleum  Technologist 
of  the  U.  S.  Bureau  of  Mines,  represented  the  United  States 


220        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

in  the  Allied  Petroleum  Committee  during  the  critical  period 
of  the  war,  should  go  much  of  the  credit  for  calling  our  atten- 
tion to  the  fact  that  outside  of  the  United  States,  Canada  and 
Mexico,  the  control  of  the  oil  situation  is  practically  monopo- 
lized by  the  British;  and  even  in  the  three  countries  just  men- 
tioned, Britain,  through  her  investments,  is  a  very  material 
factor. 

What  is  the  significance  of  this?  In  simple  language,  it 
means  that  the  British,  realizing  the  great  role  which  oil  was 
bound  to  play  in  the  future,  "beat  us  to  it"  in  acquiring  con- 
trol of  the  foreign  fields  and  potential  resources,  and  we 
loaned  her  the  money  with  which  to  do  it.  With  Great  Britain 
the  necessity  of  doing  this  was  obvious,  for  control  of  the  sea 
is  essential  to  her  very  life  as  a  nation,  and  a  sufficient  fuel 
oil  supply  of  her  own  is  indispensable  for  such  control.  With 
us  the  necessity  did  not  loom  as  great,  and  then  we  were  alto- 
gether too  complacent  as  to  our  own  "great  undeveloped  re- 
sources." For  several  years  the  Government  bureaus,  espe- 
cially the  Geological  Survey  and  Bureau  of  Mines,  and  a  few 
independent  pessimists,  have  been  endeavoring  to  awake  the 
oil  operators  of  the  country  to  the  fact  that  our  national 
reserves  were  limited  and  would  soon  yield  less  oil  than  our 
consumption.  But  the  campaign  availed  little,  for  the  propa- 
gandists were  branded  as  pessimistic  theorists.  One  of  the 
fortunate  results  of  the  war,  however,  has  been  to  educate  the 
American  oil  industry  to  its  peril,  and  now  we  are  making 
strenuous  efforts  to  gain  at  least  a  small  share  of  the  possible 
oil  territory  in  foreign  lands.  We  must  redouble  our  efforts 
along  this  line  if  we  are  to  even  get  our  proportion  of  the 
foreign  reserves,  and  if  we  expect  to  hold  our  premier  position 
in  the  world's  oil  industry  we  must  initiate  an  immediate  and 
most  aggressive  campaign.  We  should  go  frankly  to  Great 
Britain  and  demand  a  right  to  participate  in  the  development 
of  the  oil  fields  of  which  she  has  secured  virtual  control  during 
the  war.  It  is  our  plain  industrial  duty  to  do  this ;  it  is  Great 
Britain's  plain  duty  to  grant  the  demand. 

Oil  Industry  Needs  Support 

The  oil  industry  needs  the  support  of  the  mining  industry 
in  this  international  movement.  Let  us  give  it  this  support. 


PROBLEMS  OF  THE  OIL  INDUSTRY  221 

The  oil  industry  needs  the  support  of  the  American  people 
and  the  Government  in  their  efforts.  Let  us  hope  it  will  have 
the  sympathy  of  the  people  and  that  the  laws,  if  nesessary, 
will  be  so  amended  or  construed  as  to  permit  co-operation  or 
combination  among  the  various  companies  and  interests  so 
that  they  may  successfully  meet  the  colossal  competition 
offered  by  foreigners ;  and  let  us  work  to  the  end  that  a  new 
administration  may  be  installed  in  this  country  that  will,  in 
addition  to  advising  them  to  "carry  American  trade  into  all 
quarters  of  the  globe,"  protect  our  nationals  and  their  inter- 
ests when  they  go  into  foreign  countries  to  assist  in  the 
development  of  natural  resources. 

The  British  Government  is  going  so  far  in  its  support  of 
its  nationals  as  to  take  a  very  large  interest  in  the  Anglo- 
Persian  Oil  Company,  controlling  the  Persian  fields,  and  the 
Dutch  Shell  Companies,  controlling  the  oil  industry  of  the 
Dutch  East  Indies,  Venezuela,  a  large  percentage  of  Mexico 
and  important  holdings  in  the  United  States  and  elsewhere. 
Furthermore,  Great  Britain  permits  no  foreign  control  of  any 
oil  company  operating  in  her  domains.  With  the  adoption  of 
this  attitude  on  the  part  of  the  British  Government  it  behooves 
this  country  to  pass  legislation  which  will  protect  our  oil 
deposits  from  foreign  control  or,  possibly  better,  arrange  some 
reciprocal  agreement  which  will  permit  foreigners  to  have  the 
same  rights  in  our  country  as  are  enjoyed  by  Americans  in 
the  respective  foreign  countries. 

High  Cost  of  Operation 

Like  all  others  requiring  man-power  for  their  operation,  the 
oil  industry  is  confronted  with  double,  triple  or  even  greater 
costs  of  operation  over  the  costs  of  a  few  years  ago.  In  many 
fields  where  formerly  the  work  day  was  divided  into  two 
^"towers"  (shifts),  of  twelve  hours  each,  the  eight-hour  day 
prevails,  thus  adding  50  per  cent,  to  the  cost  of  this  one  item 
of  labor.  Materials  have  risen  from  two  to  five  times  in  cost, 
so  that  the  expense  of  well  drilling,  tank,  pipe  line  and  refinery 
construction,  etc.,  has  risen  proportionately.  These  charges 
must  be  spread  over  the  production  cost  and  eventually  passed 
on  to  the  consumer.  Unfortunately  for  the  oil  operator,  Public 
Service  Commissioners  and  others,  responding  to  the  popular 


222         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

clamor,  are  prone  to  base  their  price  fixing  on  the  production 
costs  of  the  most  successful  or  fortunate  companies  operating 
in  the  most  remunerative  fields,  which  ofttimes  works  a  great 
hardship  on  the  small  operator,  or  those  deriving  their  pro- 
duction from  fields  in  which,  owing  to  the  small  size  of  the 
wells  or  rapid  decrease  in  production,  the  costs  are  high. 

Let  us  hope  those  in  authority,  such  as  the  various  Public 
Utility  Commissioners  and  the  Federal  Trade  Commission, 
will  examine  closely  into  the  technical  phases  of  the  business, 
its  various  hazards,  such  as  rapid  decrease  in  production  of  oil 
or  reduction  in  pressure  in  the  gas  fields,  before  refusing 
reasonable  advances  in  sale  price  of  these  commodities  in  the 
future.  If  such  authority  is  not  generous  in  its  rulings,  it  will 
result  in  the  abandonment  of  many  oil  and  gas  fields  long 
before  they  are  exhausted,  simply  because  the  operating  cost 
in  these  old  or  "lean"  fields  may  be  prohibitive  as  compared 
with  the  more  highly  productive  areas. 

The  Federal  Income  Tax  Problem 

One  of  the  problems  shared  in  common  by  the  mining  and 
oil  industries  is  that  of  the  Federal  income  and  excess  profits 
taxes.  This  problem  affects  all  industries,  but  mining,  oil,  gas 
and  timber  are  particularly  affected  by  it,  because  of  the  fact 
that  they  are  industries  with  wasting  assets.  When  one  sells 
the  product  of  a  mine  or  oil  well  and  secures  a  profit  there- 
from, the  supposed  profit  really  includes  a  return  of  a  certain 
percentage  of  the  capital,  plus  the  real  profit,  if  any  has 
actually  been  derived.  It  is,  therefore,  necessary  in  handling 
the  tax  problems  of  the  industries  with  wasting  assets  to 
provide  for  a  segregation  of  the  capital  returned  by  the  trans- 
action, and  the  actual  profit.  This  is  done  by  allowing  the 
taxpayer  to  deduct  from  his  gross  income  a  certain  amount, 
known  as  the  depletion  allowance,  which  represents  the  cost 
of  the  product  from  which  the  year's  gross  profits  are  derived. 
If  the  taxes  were  the  same  over  all  the  years,  it  would  make 
but  little  difference  how  this  depletion  allowance  was  com- 
puted, so  long  as  the  taxpayer  was  able  to  secure  the  actual 
return  of  money  invested  over  the  period  of  production.  When 
taxes  vary  from  year  to  year,  it  is  only  fair  to  the  Government 
and  to  the  taxpayer  to  make  the  depletion  deduction  propor- 
tionate to  the  portion  of  the  total  deposit  produced  during  the 


PROBLEMS  OF  THE  OIL  INDUSTRY  223 

tax  year.  This  involves  the  estimate  of  the  total  amount  of 
the  commodity,  such  as  oil  or  gas,  originally  in  the  ground  at 
the  beginning  of  the  period  over  which  the  deductions  are 
taken.  Oil  and  gas  operators  formerly  used  a  method  known  as 
"reduction  in  flow"  method  for  computing  their  depletion. 
This  method  was  based  on  taking  the  difference  between  the 
daily  production  at  the  beginning  of  the  year  and  daily  pro- 
duction at  the  end  of  the  year.  If  the  production  at  the  end 
of  the  year  was  less  than  at  the  beginning,  a  proportionate 
part  of  this  cost,  based  on  the  difference  in  production  at  the 
two  dates,  was  written  off  as  depletion.  If  there  was  no  reduc- 
tion in  flow  during  the  year,  no  depletion  was  taken.  It  is 
quite  obvious  to  anyone  who  will  give  the  matter  even  super- 
ficial thought  that,  if  any  oil  or  gas  was  produced  during  the 
year,  the  property  must  have  sustained  depletion,  and  any 
method  that  would  permit  of  the  production  of  oil  or  gas  from 
a  property  and  would  indicate  little  or  no  depletion  of  the 
-deposit  during  this  period  of  production  would  necessarily  be 
inapplicable  for  tax  purposes. 

After  a  campaign  for  collecting  data  and  of  study,  the 
Internal  Revenue  Bureau  adopted  the  same  plan  of  estimating 
depletion  for  the  oil  and  gas  industry  as  has  been  common  for 
the  mining  industry  for  a  long  time — namely,  the  "unit  cost" 
method.  This  involves  the  estimating  of  the  reserves  or 
number  of  units  of  the  commodity  in  the  ground,  the  total  cost 
of  these  units  and  the  division  of  the  total  cost  by  the  number 
of  units  to  arrive  at  the  cost  per  unit  of  the  commodity. 
Miners  have  recognized  for  years  the  possibility  of  making 
reasonably  accurate  estimates  of  reserves.  Oil  men  have 
daimed  that  it  was  impossible  to  even  approximate  the  re- 
serves or  future  production  of  a  tract.  A  careful  study  and 
co-ordination  of  a  large  amount  of  information  has  shown  that 
fairly  accurate  estimates  may  be  made  in  those  fields  where 
production  has  been  going  on  for  several  years.  By  means  of 
decline  curves  the  probable  productivity  of  the  wells  may  be 
estimated  and  these  totaled  to  give  the  estimated  future  of 
tracts  which  are  the  units  involved  in  all  tax  problems.  The 
cost  of  each  tract  having  been  found,  this  is  divided  by  the 
number  of  units  and  the  quotient  multiplied  by  the  amount 
produced  during  the  year  to  give  the  relative  proportion  of 
depletion  to  be  written  off  for  that  year. 


224        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Estimating  Reserves 

The  problem  of  estimating  reserves  for  this  purpose  is  one 
that  has  been  met  by  the  industry,  and  those  studying  it,  in  a 
way  that  it  is  believed  will  enable  the  taxpayers  of  the  oil  and 
gas  industries  to  satisfactorily  compute  their  depletion  allow- 
ances in  most  instances. 

Another  point  in  common  between  the  mining  and  oil  indus- 
tries is  that  of  valuation  of  oil  properties  as  of  March  1,  or 
subsequent  dates  under  certain  circumstances.  Valuation  is 
simply  an  opinion,  and  is  ordinarily  not  specific.  Many  factors 
enter  into  the  determination  of  value,  among  the  most  impor- 
tant being  engineers'  appraisals  of  the  property,  values  estab- 
lished by  the  sales  of  similar  properties  in  the  neighborhood, 
the  listed  value  of  stocks  covering  the  property  (which  gives 
the  public's  opinion  of  the  value),  and  several  other  factors. 
Valuation  should  be  conservative,  because  when  once  estab- 
lished it  may  have  to  be  used  at  one  time  for  ad  valorem  tax, 
where  it  is  to  the  interest  of  the  taxpayer  to  have  the  value 
low;  or,  at  another,  as  the  basis  for  income  or  excess  profits 
taxes,  where  it  is  to  the  advantage  of  the  taxpayer  to  have 
them  high.  The  just  valuation,  based  on  the  various  factors 
involved,  is  the  one  sought  by  the  Government  and  should  be 
sought  by  the  taxpayers  for  all  bases  of  calculation.  The  oil 
industry  is  meeting  this  problem  of  valuation  by  co-operative 
methods  among  the  geologists  and  engineers  to  whom  the 
study  of  valuation  is  largely  delegated.  This  insures  at  least 
fair  approximates  of  value  and  figures  which  should  and  will 
doubtless  be  given  serious  consideration  by  the  authorities  in 
Washington  who  have  to  pass  on  the  returns.  Such  a  plan 
for  reaching  equitable  values  would  be  most  valuable  in  the 
mining  industry,  and  the  suggestion  is  offered  that  it  be 
adopted,  if  possible,  by  the  larger  companies. 

In  certain  fields  where  the  decrease  in  the  production  of 
the  wells  has  been  more  rapid  than  anticipated,  it  will  be 
necessary  for  the  companies  to  write  off  a  very  large  depletion 
allowance  in  order  to  avoid  paying  a  tax  on  capital ;  or,  in  other 
words,  avoid  leaving  part  of  their  investment  in  the  property 
at  the  time  the  well  ceases  to  be  commercially  productive. 
This  problem  faces  a  number  of  the  new  oil  fields  where  flush 
flow  has  been  high  but  an  abnormal  decline  has  followed  the 
drilling  of  many  wells  in  the  district. 


PROBLEMS  OF  THE  OIL  INDUSTRY  225 

Question  of  Depletion 

The  question  of  depreciation  is  one  that  is  linked  with  that 
of  depletion,  for  it  is  obvious  that  physical  properties  such 
as  machinery,  pipe  lines,  etc.,  which  are  more  or  less  stationary 
in  character,  and  used  in  any  particular  field,  become  prac- 
tically valueless  when  the  oil  in  the  field  is  exhausted  and  their 
mechanical  usefulness  is  ended.  For  that  reason,  where  ordi- 
narily a  depletion  charge  of  10  per  cent,  would  be  reasonable 
as  indicating  the  actual  wear  and  tear  on  machinery  it  is 
often  necessary  to  write  off  20  per  cent.,  or  even  35  per  cent, 
or  40  per  cent,  in  those  cases  where  the  fields  themselves 
become  exhausted  in  from  three  to  five  years.  The  attention 
of  the  operators  should  be  given  to  this  question,  as  it  is  most 
essential  in  arriving  at  just  deductions  for  depreciation. 

Many  other  minor  problems  associated  with  Federal  taxa- 
tion are  being  faced  by  the  oil  industry,  but  these,  like  the 
major  ones  just  discussed,  can  be  successfully  met  if  the  indus- 
try co-operates  with  the  Internal  Revenue  Bureau  in  the  future 
with  the  same  spirit  as  it  has  in  the  past.  One  serious  embar- 
rassment in  this  connection  is  the  difficulty  the  Bureau  is 
having  in  securing  the  necessary  competent  technical  assist- 
ants to  expedite  the  work  of  the  Bureau.  This  is  due  to  the 
meagre  salaries  paid  by  the  Government  as  compared  with 
those  paid  on  the  outside.  It  is  hoped  that  this  condition  may 
be  bettered  in  the  readjustment  of  Government  salaries  now 
taking  place. 


226        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


MINES  TAXATION  OF  ARIZONA 

MR.  ZANDER:  As  the  chairman  has  stated,  Mr.  Howe,  of 
Kansas,  and  myself  are  visiting  this  Conference,  especially  this 
session  this  morning,  as  members  of  the  Special  Committee  on 
Mine  Taxation  of  the  National  Tax  Association,  in  order  to 
obtain  the  views  of  mining  men,  especially,  as  well  as  the  views 
and  practices  of  those  charged  with  the  administration  of  the 
Federal  income  tax. 

I  must  say  that  I  have  been  greatly  interested.  I  put  in 
about  three  hours  of  the  hardest  thinking  I  have  done  for  a 
long  time  while  present  here  this  morning.  A  great  many 
questions  have  been  presented  that  I  could  not  touch  upon  at 
this  time,  because  they  are  framed  in  terms  and  phrases  dif- 
ferent from  those  which  I  am  accustomed  to. 

There  are  a  few  outstanding  features,  it  seems  to  me,  in  this 
discussion — one  mentioned  by  the  second  paper,  that  there  has 
been  too  much  confusion  about  taxation  in  the  minds  of  mem- 
bers of  the  Congress  and  state  legislatures.  That  struck  me 
very  forcibly,  because  I  so  heartily  agreed  with  it. 

I  took  occasion  at  one  time  to  write  something  on  that  sub- 
ject and  incorporated  it  in  the  last  report  of  the  Arizona  Tax 
Commission.  Legislators  think  the  subject  is  complicated  and 
difficult,  then  attempt  to  lay  out,  by  metes  and  bounds,  prin- 
ciples and  methods  of  procedure  to  be  followed  by  the  admin- 
istrators, at  the  same  time  admitting  that  they  know  practically 
nothing  about  it. 

Determining  Invested  Capital 

You  will  notice  in  the  Federal  income  tax  law  last  passed, 
which  was  a  wonderful  improvement  over  the  previous  one, 
that  safter — in  rough  language — setting  up  what  invested 
capital  is,  so  that  those  charged  with  the  administration  of  it 
would  be  informed  as  to  what  it  was,  your  Congress  then 
demonstrates  it  knows  nothing  about  it,  because  it  travels  along 
to  that  point  where  it  sees  that  it  cannot  determine  what  in- 
vested capital  is,  and  then  says :  "These  people  are  charged 
with  its  administration  and  must  determine  what  invested 


MINES  TAXATION  OF  ARIZONA  227 

capital  is."  That  provision,  by  the  way,  you  will  find  in  nearly 
all  specific  tax  legislation  from  one  end  of  this  country  to  the 
other. 

We  have,  after  all  the  ages  of  experience,  come  to  the  con- 
clusion that  legislatures  cannot  determine  what  law  is,  but 
have  set  up  courts  for  that  purpose.  I  am  happy  to  say  that 
the  trend  of  thought  today  in  tax  matters  is  for  legislatures  to 
set  up  tax  courts  to  interpret  what  value  is.  It  is  not  an  exact 
thing;  it  is  a  matter  of  opinion.  If  I  were  drafting  a  Federal 
income  tax,  I  would  say :  "The  department  charged  with  its 
administration  shall  collect  and  tax  with  respect  to  the  brackets 
which  I  set  up,  upon  an  equitable  valuation,  as  they  might 
determine."  That  would  be  all  there  would  be  to  it.  I  would 
clothe  that  department  with  unlimited  authority  and  unlimited 
revenue,  and  then  endeavor  to  get  men  who  had  had  experience 
in  those  matters,  just  as  we  endeavor  to  get  judges  in  the  court 
to  interpret  the  law. 

I  came  here  hoping  to  find  out  something  about  the  valua- 
tion of  a  mine,  as  determined  by  Federal  income  tax  admin- 
istrators, or  to  get  an  expression  of  opinion  of  mine  owners  or 
mine  operators.  While  the  subject  has  been  touched  upon  and 
brushed  against  considerably,  I  am  in  the  same  frame  of  mind 
that  I  was  when  I  came — that  is,  that  it  is  still  a  question  which 
needs  a  great  deal  of  thought,  a  great  deal  of  conference,  honest 
and  unbiased  expression  of  opinion. 

The  Arizona  Method 

So  far  as  the  experience  in  Arizona  is  concerned,  we  have 
decided  that  it  is  practical  for  mines  in  that  state,  which  can- 
not be  determined  by  drill  holes,  to  take  a  method  that  does  not 
attempt  to  be  absolutely  specific,  but  nevertheless  a  method 
that  does  recognize  the  wasting  asset  and  gives  due  considera- 
tion to  it.  We  do  that  by  taking  those  mines  that  seem  to  group 
themselves  naturally  together,  and  which  seem  to  give  assur- 
ance as  a  whole  of  a  certain  accepted  life  in  the  opinion  of  the 
men  operating  them,  those  who  have  to  do  with  examining 
them  and  the  general  public,  and  it  has  worked  fairly  well. 

When  it  comes  to  laying  down  a  rule  to  be  followed  in  all 
instances,  I  think  when  we  give  it  full  consideration  we  will 
back  off  and  away  from  that  idea.  My  opinion  is  that  it  will 


228        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

be  something  which  the  state  will  determine — that  is,  to  hon- 
estly and  effectively  and  equitably  assess  mining  property  of 
all  kinds,  to  charge  that  duty  to  an  authority  that  is  not  ham- 
pered by  any  restrictions,  and  allow  them  to  gather  the  best 
opinion,  the  best  information  upon  the  subject,  and  then  to 
formulate  that  opinion  on  their  judgment. 


NATIONAL  TAX  ASSOCIATION 


NATIONAL  TAX  ASSOCIATION 

MR.  HOWE :  I  came  here  to  be  enlightened  rather  than  to 
teach  and  to  enlighten  others.  You  may  not  be  familiar  with 
the  National  Tax  Association.  It  is  an  organization  with  a 
large  membership  composed  of  political  economists,  capitalists, 
business  men  and  administrative  officers. 

That  association  promotes  an  annual  conference  at  which 
the  voting  power  is  largely  of  delegates  appointed  by  the  gov- 
ernors of  the  states  and  presidents  of  the  universities.  The 
association  stands  sponsor  for  what  is  called  a  "model  tax 
system,"  designed  to  procure  uniform  tax  laws  throughout  the 
states  of  the  Union,  so  as  to  avoid  double,  triple  and  other 
multiple  unjust  taxation.  A  working  plan  was  devised  and 
adopted  at  the  last  conference  in  Chicago.  Several  sub- 
committees have  been  appointed  to  take  up  other  branches  of 
the  subject. 

Briefly,  it  may  be  stated  that  the  model  tax  system  provides 
for  practically  two  tax  propositions:  First,  property  tax; 
second,  an  income  tax.  Property  tax  designed  for  property  to 
pay  to  the  state  where  it  is  located,  for  its  protection,  its  share 
of  the  public  burden.  The  personal  income  tax  is  a  tax  on  the 
individual  in  the  state  in  which  he  is  domiciled. 

There  is,  in  addition  to  that,  a  business  tax  designed  to  help 
non-resident  investments  so  as  to  have  them  bear  their  share 
of  the  local  burden,  but  that  is  not  included  as  a  compulsory 
part  of  the  system.  Many  of  the  Southern  States  have  a  system 
of  business  taxes. 

A  sub-committee  has  been  appointed  on  the  question  of  tax 
of  the  mines  and  mining  interest,  and  myself  and  one  or  two 
other  members  of  the  committee  are  here  for  the  purpose  of 
getting  information  upon  that  subject.  We  have  to  prepare  a 
report,  and  we  wish  to  prepare  a  report  which  will  be  fair  to 
those  interests,  treat  them  fairly  and  equitably  in  connection 
with  all  other  property  interests. 


230        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

MINNESOTA  TAX  COMMISSION 

DR.  KURD :  I  will  not  take  the  time  to  tell  you  that  I  am 
unprepared,  but  will  go  right  to  it  and  tell  you  as  quickly  and 
briefly  as  possible  what  we  have  done  and  what  we  are  doing 
in  mine  taxation.  The  Tax  Commission  was  created  in  1907. 
There  were  two  very  important  things  the  commission  under- 
took to  accomplish  immediately  after  organization.  One  was 
to  find  the  true  assessed  value  of  realty.  The  law  called  for 
all  property  to  be  assessed  at  its  full  value — 100  per  cent.  The 
other  was  to  undertake  an  investigation  of  the  iron  ore  deposits 
of  the  state  and  place  thereupon  an  ad  valorem  value. 

I  was  then  secretary  of  the  commission  and  had  graduated 
in  engineering  and  knew  considerable  about  the  mines,  and 
undertook  that  work  for  the  commission.  We  sent  field  men 
all  over  the  state  to  get  the  sales  of  real  estate  for  the  previous 
five-year  period  and  the  records  of  the  assessments.  These 
sale  records  were  thoroughly  fielded  in  all  the  county  seats, 
through  bankers  and  real  estate  men,  as  to  whether  the  sales 
were  legitimate  or  not,  and  all  doubtful  cases  were  discarded. 
Then  adding  up  the  sale  price  and  the  assessed  price  we  had  a 
ratio  for  any  county,  any  village,  any  city,  any  assessment  dis- 
trict. Through  this  sales-assessment  system  the  Tax  Commis- 
sion found  that  the  true  assessed  value  of  real  estate  in  the 
state  was  approximately  33.7  per  cent. — not  100  per  cent. 

Companies  Co-Operated 

We  called  upon  all  the  mining  companies  to  supply  us  with 
their  estimates,  blueprints  of  exploration,  drilling,  mine  maps, 
etc.,  and  they  responded  promptly.  We  have  never  had  any 
trouble  with  the  mining  men  of  Minnesota,  and  that  first  year 
they  turned  over  to  us  their  estimates  of  1,200,000,000  tons  of 
merchantable  iron  ore,  actually  developed,  measured,  calculated 
and  known.  Nature  has  been  good  to  the  Tax  Commission  in 
Minnesota,  in  depositing  iron  ore  which  you  can  drill  and  ex- 
plore and  determine  the  outline  and  measure  the  body  and  get 
its  average  grades. 

I  wrote  a  mineral  chapter  for  our  last  report,  and  to  illus- 


NATIONAL  TAX  ASSOCIATION  231 

trate  a  certain  point  I  showed  that  1,200,000,000  tons  was 
reported  in  1907,  and  they  had  shipped  out  from  1907  to  1918 
over  300,000,000  tons  of  ore,  and  they  still  had  some  264,000,- 
000  tons  more  than  they  started  with  in  1907.  That  is  "some" 
iron  ore  to  be  newly  developed.  I  don't  know  much  except 
iron  ore.  I  have  lived  with  it  day  and  night  and  thought 
it  out  in  every  possible  way  to  arrive  at  its  value  metallurgically 
and  chemically. 

We  are  dealing  with  a  known  quantity — that  is,  the  developed 
tonnage.  Knowing  the  grade  of  ore  or  the  general  average 
grade  of  the  operations  of  the  property,  whether  it  is  under 
ground  or  open  pit,  or  both,  the  miner,  if  he  knows  his  business, 
must  keep  to  that  grade,  for  if  he  ships  out  only  the  good  ore 
he  will  soon  have  a  non-merchantable  mine  on  his  hands. 

The  general  practice  in  Minnesota  is  to  ship  by  groups,  mix- 
ing ores.  That  brings  to  value  a  very  great  tonnage  which 
otherwise  would  be  non-merchantable.  There  is  a  great  quan- 
tity of  ore  that  is  45  per  cent,  natural  iron,  shipped  to  lower 
lake  ports  through  this  mixing,  and  the  equalized  grade  is 
acceptable  to  the  furnace,  that  the  operator  can  produce  and 
deliver  at  a  profit. 

Classification  Law 

Now,  then,  by  the  way,  we  assessed  iron  ore  in  1907  at  43 
per  cent,  of  its  true  and  full  value,  and  that  ratio  has  been 
gradually  increased  by  5  per  cent,  increases  until  the  legisla- 
ture passed  what  is  known  as  the  "Classification  Assessment 
Law."  Iron  ore  is  in  Class  1,  mined  ore,  unmined  ore  and 
assessed  at  50  per  cent,  of  its  true  and  full  value;  farm  lands, 
33%  per  cent.;  platted  property,  40  per  cent. 

Our  assessed  rates  will  run  anywhere  from,  say,  10  cents  a 
ton  in  the  ground  up  to  38  cents.  The  latter  would  be  76  cents 
of  full  value.  That  would  be  the  Mahoning  mine,  a  very  large 
deposit.  The  Mahoning  deposit  is  nearly  two  miles  long, 
nearly  all  uncovered.  Millions  of  yards  of  glacial  drift  over- 
burden have  been  removed  to  open  these  properties  for  open 
pit  mining. 

We  group  the  deposits  as  follows :    Six  classes  of  active  ship- 


232        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ping  mines  and  six  classes  of  reserve  mines  that  are  to  be  mined 
in  the  future.  Let  me  illustrate  with  three  properties:  Here 
is  an  open  pit,  active,  shipping  mine;  here  is  an  underground, 
shipping  mine ;  there  is  a  reserve — nothing  has  been  done  to  it 
except  to  drill  it  and  know  its  tonnage  and  grade.  Now,  there 
is  absolutely  no  difference  in  the  future  value  of  the  ore  if  of 
equal  grades  in  any  one  of  those  properties.  The  difference  is 
all  in  the  present  value,  in  the  discounting  of  their  future.  This 
active  mine  will  be  exhausted  long  before  that  reserve,  so  the 
discount  period  would  be  different.  There  is  a  misunderstand- 
ing on  that  point,  but  that,  as  a  matter  of  fact,  is  the  way  it 
stands. 

Manganif erous  Iron 

We  have  approximately  1,500,000,000  tons  of  developed, 
measured,  merchantable  iron  ore.  We  have  a  great  deal  of 
manganiferous  iron  ore.  I  know  we  have  one  deposit.  I  sup- 
pose it  is  the  largest  deposit  of  manganiferous  iron  ore  in  the 
world.  I  think  it  must  contain  10,000,000  tons.  The  operator 
has  stripped  about  80  acres,  and  he  is  trying  to  create  a  demand 
and  a  market  for  this  material.  There  have  been  all  sorts  of 
beneficial  methods  attempted  to  improve  the  low  grade  of  man- 
ganiferous ore,  thus  far  without  success ;  but  metallurgy,  very 
fortunately  for  the  world,  is  not  a  fixed  science,  and  I  have  no 
doubt  in  time  the  problem  will  be  solved  to  separate  the  man- 
ganese from  the  iron.  They  are  both  about  the  same  weight, 
but  seem  to  be  chemically,  mechanically,  physically  combined. 
How  are  they  to  be  separated  is  the  problem  awaiting  solution. 

There  was  considerable  of  that  material  shipped  in  this  war 
minerals  relief,  and  a  temporary  value  created,  which,  for  the 
time  being,  has  disappeared.  We  have  just  completed,  about 
two  weeks  ago,  the  equalization  of  the  value  of  all  the  mineral 
properties,  and  on  these  manganiferous  properties  we  shot  last 
year's  assessed  value  all  to  pieces.  What  was  an  assessment 
of  $1  per  ton  last  year  is  10  or  15  cents,  to  give  them  relief 
until  they  can  find  a  value. 

It  is  a  big  story.    I  could  keep  you  a  long  time  on  this.    I  am 


NATIONAL  TAX  ASSOCIATION  233 

very  much  obliged  to  you  and  appreciate  the  compliment  of  this 
call  upon  me. 


Co-operation  with  Government 

Upon  motion  of  Mr.  Ravanel  Macbeth,  of  Idaho,  the  chairman  was 
requested  to  furnish  copies  of  all  addresses  upon  mines  taxation  to  Com- 
missioner Roper  of  the  Revenue  Bureau. 


ADJOURNED 


234         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


ADDRESS  OF  WELCOME 

On  Behalf  of  the  Commonwealth  of  Missouri,  by  Former  United  States 

Senator  XENOPHON  P.  WILFLEY,  Representing 

GOT.  Frederick  D.  Gardner 

Mr.  Chairman,  Ladies  and  Gentlemen :  The  Governor  of  the 
State  of  Missouri  has  asked  me,  as  his  representative,  to  wel- 
come this  Congress  to  this  Commonwealth.  I  do  not  come  with 
a  studied  speech,  because  I  was  not  advised  of  this  honor  until 
Saturday  afternoon. 

I  had  no  idea  of  telling  you  a  story  when  I  came  into  this 
meeting,  but  since  your  worthy  chairman  has  sought  to  illus- 
trate a  situation  by  telling  a  story,  I  am  reminded  of  one  which 
is  somewhat  appropriate  in  illustrating  the  position  I  occupy 
in  representing  the  Governor  of  the  State  of  Missouri  in  wel- 
coming this  important  Congress.  There  was  a  little  negro 
down  in  Texas  who  had  become  a  nuisance  in  his  community 
because  of  watermelon  stealing  and  chicken  stealing  and  craps 
shooting,  so  he  left  and  went  up  into  the  State  of  Arkansas 
and  began  to  preach.  He  met  with  remarkable  success.  He 
had  a  very  large  congregation  one  Sunday  evening,  and  as  he 
looked  out  over  the  audience  he  observed  a  former  pal  of  his 
from  down  in  Texas  who  was  in  the  habit  of  making  spon- 
taneous exclamations  at  the  wrong  time ;  and  this  new  preacher 
was  very  much  alarmed  lest  his  former  pal  would,  when  he 
saw  him  in  the  pulpit,  give  impromptu  expression  that  would 
be  embarrassing.  So  the  preacher  thought  as  fast  as  he  could, 
and  when  he  got  up  he  said :  "Brethren  and  sisters,  I  take  my 
text  this  evening  from  that  familiar  passage  of  the  Scripture, 
Deuteronomy  vii,  11;"  and  then  he  looked  directly  at  his  com- 
rade and  said:  "If  ye  know  me,  say  nothing;  I  will  see  ye 
later."  [Laughter.] 

I  take  it  for  granted  that  the  chief  concern  of  this  Congress 
at  this  time  is  the  chief  concern  of  every  industrial  congress 
that  assembles  upon  the  face  of  the  earth — to  increase  pro- 
duction. You  were  organized  in  normal  times,  when  the  prob- 
lems which  confronted  you  might  be  solved  in  the  light  of 


ADDRESS  OF  WELCOME  235 

experience.  Today  you  are  assembled  at  an  extraordinary 
time  in  the  world's  history,  with  new  problems  confronting 
you  that  must  be  met  and  solved,  not  in  the  light  of  experience, 
because  you  have  never  had  a  similar  experience,  and  hence 
you  are  to  counsel  together  that  you  may  meet  these  new 
conditions  and  solve  them  with  the  combined  intelligence  of 
the  mining  men  of  the  world. 

The  wreck  of  war  has  not  only  destroyed  much  of  the  prod- 
ucts of  the  earth,  but  has  absolutely  impaired  the  productivity 
of  industry  in  almost  every  quarter  of  the  globe.  We  in  this 
country  are  confronted  not  with  the  problems  of  reconstruc- 
tion, but  more  particularly  with  problems  of  readjustment,  in 
order  that  we  may  be  attuned  to  the  spirit  and  demand  of  all 
the  world  to  provide  more  of  the  necessities  of  life  than  are 
now  being  produced,  in  order  to  meet  the  needs  of  mankind. 

The  production  of  mines  differs  from  the  production  of 
other  industries,  in  that  the  agriculturist  has  the  resources  of 
nature  to  aid  him  every  day  in  growing  his  corn  and  cotton, 
and  wool  and  cattle,  and  fruits  and  vegetables.  You  are  en- 
gaged in  the  business  of  discovering  where  nature  has  locked 
the  valuable  minerals  and  are  seeking  to  open  the  reservoir 
that  you  may  contribute  the  ores  which  form  necessary  ele- 
ments in  the  machinery  of  production. 

Increased  Production  Needed 

Today  the  call  comes  not  only  to  field  and  factory,  but  to 
mines,  for  an  increased  production.  It  comes  at  a  time  when 
there  is  great  social  and  economic  unrest.  It  is  perfectly 
natural  that  there  should  be  disturbance  in  the  minds  of  the 
people  and  in  the  forces  of  industry  at  this  time,  not  only 
because  we  have  just  passed  through  a  war  that  has  left  the 
greatest  wreck  in  the  history  of  the  human  race,  but  also 
because  of  the  fact  that  so  many  of  the  countries  engaged  in 
that  war  have  had  their  governments  overthrown  and  are  now 
groping  around  for  a  new  form  of  government  and  a  new 
method  of  administration.  Germany  has  been  rid  of  the 
House  of  Hohenzollern,  Austria  of  the  House  of  Hapsbtirg, 
and  Russia  of  the  House  of  Romanoffs,  but  orderly  govern- 
ments have  not  supplanted  those  dynasties  in  a  manner  to 
command  the  confidence  of  the  people. 


236         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

History  records  that  in  every  world  crisis  reformers  have 
arisen  who  sought  to  remedy  conditions  by  revolutionary 
methods.  Those  methods  seriously  impair  the  welfare  of  the 
countries  of  Europe  today.  To  some  they  appear  to  be  a  dan- 
ger, if  indeed  not  a  menace,  to  the  welfare  of  this  country,  for 
very  different  reasons  than  those  which  exist  in  foreign  lands. 
While  Europe  has  been  impoverished  by  war,  this  country  has 
been  materially  enriched  by  war.  That  is  not  a  matter  for 
boast — it  is  not  a  matter  for  lament.  The  position  we  occupy 
has  come  to  us  in  the  natural  course  of  extraordinary  events. 
We  today  occupy  the  dominant  position  among  the  nations  of 
the  earth,  because  of  the  fact  that  our  institutions  have  suf- 
fered less  from  the  wreck  of  war  than  the  institutions  of 
other  nations  of  the  earth.  We  occupy  the  commanding  posi- 
tion of  the  world  in  finance  and  industry,  and,  more  than  that, 
we  occupy  this  commanding  position  by  reason  of  the  fact  that 
there  is  in  this  country  a  national  solidarity  in  support  of  the 
Government.  [Applause.] 

Business  Is  Nervous 

This  is  a  very  helpful  condition  in  solving  the  difficulties 
which  confront  you.  Business  is  nervous  and  unstable,  be- 
cause, forsooth,  there  is  a  spirit  of  profiteering  in  both  capital 
and  labor,  and  there  is  some  danger  in  expressing  positively  a 
criticism  of  either  lest  it  might  be  misunderstood  for  radi- 
calism. I  believe  in  a  fair  and  temperate  discussion  of  the 
rights  of  capital  and  labor.  I  believe  that  there  should  be  a 
proper  adjustment  of  the  relations  between  these  two  essential 
elements  of  production,  and  that  each  should  be  heard  until 
they  have  expressed  their  full  program.  But  when  either 
capital  or  labor  attempts  to  bring  any  organization  between  a 
man  and  his  government,  then,  my  fellow-citizens,  it  is  open  to 
criticism  and  condemnation.  [Applause.] 

There  are  two  institutions  in  this  country  that  we  hold 
sacred — the  one  is  the  family  and  the  other  is  the  government. 
[Applause.]  I  never  had  the  pleasure  of  seeing  John  L.  Lewis, 
of  the  Miners'  Union,  but  I  feel  a  high  degree  of  respect  for 
him  today  when  I  read  this  message  he  sent  to  his  organiza- 
tion: "We  must  obey  the  mandate  of  the  courts.  We  are 
Americans  before  we  are  members  of  any  labor  organization." 
[Applause.] 


ADDRESS  OF  WELCOME  237 

As  a  lawyer,  I  realize  what  it  means  to  have  a  court  decide 
against  you,  when  you  feel  the  decision  should  be  in  your 
favor,  and  I  think  that  Mr.  Lewis  deserves  more  credit  for 
taking  this  positive  stand  in  the  face  of  the  fact  that  he  felt 
the  decision  should  have  been  otherwise,  than  he  would  have 
deserved  had  he  fully  and  thoroughly  acquiesced  in  the  order 
of  the  court.  This  is  a  time  when  every  American  citizen,  in 
working  out  these  tremendous  problems  that  confront  us  by 
reason  of  the  extraordinary  conditions  brought  about  by  the 
war,  must  place  his  Government  first  and  foremost  in  his 
consideration. 

I  desire  to  say  one  word  on  behalf  of  the  Attorney-General 
of  the  United  States,  who  has  announced  a  campaign  that 
extends  to  the  furthermost  borders  of  these  United  States, 
which  proposes  to  call  to  account  and  deal  in  cold  justice  with 
any  and  every  man  who  is  seeking  to  sow  seeds  of  discord  and 
dissension  in  this  country. 

America  Is  Watched 

At  this  particular  hour  our  friends  across  the  seas  look 
upon  us  doubtless  with  mingled  feelings.  Some  of  them  look 
upon  us  with  envy,  some  possibly  with  suspicion ;  indeed,  there 
may  be  some  who  look  upon  us  with  bitterness,  but  I  believe 
the  vast  majority  of  them  look  upon  us  with  confidence  and 
hope.  They  look  upon  this  nation  with  the  confidence  that  our 
people  will  meet  the  great  responsibility  that  is  placed  upon 
us  by  reason  of  the  dominant  position  that  we  occupy  in  this 
critical  period  of  the  world's  history.  They  are  striving  to 
restore  business  and  establish  law  and  order.  Before  the 
armistice  was  signed,  commissions  came  to  this  country  from 
Germany,  France  and  England  to  study  conditions  here,  be- 
cause they  realized  that  we  would  be  in  a  position  of  great 
power  and  influence  when  the  war  had  ended.  That  power  and 
influence  brings  with  it  great  responsibility. 

It  is  not  the  American  idea  to  stifle  industry.  It  is  not  the 
American  idea  to  lessen  production.  The  American  idea  is  for 
greater  and  livelier  industry  throughout  the  world.  We  believe 
in  the  program  of  increased  production.  We  realize  that  there 
are  certain  limitations  of  government  in  regulating  the  high 
cost  of  living.  We  realize  that  it  is  not  the  province  of  govern- 


238         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ment  to  fix  prices  in  time  of  peace.  We  realize  the  chief  con- 
cern of  every  government  must  be  to  preserve  law  and  order, 
in  order  that  man  may  develop  industry  and  extend  the  influ- 
ence of  that  industry  in  every  direction  that  it  may  be  done  in 
a  legitimate  way. 

Danger  in  Idleness 

Today  all  of  the  nations  of  the  earth  are  seeking  to  attain 
a  position  where  each  can  get  its  just  part  of  the  world's 
wealth.  We  welcome  that  rivalry.  We  ask  nothing  that  we 
do  not  deserve,  but,  my  fellow-citizens,  the  danger  that  lurks 
In  our  pathway  at  this  time  is  the  danger  that  comes  from 
idle  hands;  is  the  danger  that  comes  from  those  who  seek 
something  for  nothing;  is  the  danger  that  comes  from  that 
class  of  people  who  seek  an  unfair  advantage.  [Applause.] 

Our  Government  is  founded  upon  the  idea  of  the  greatest 
possible  liberty — not  for  idleness,  but  for  work.  I  hope  the 
keynote  of  this  Congress  will  be  greater  production.  [Applause.] 
That  cannot  be  brought  about  by  mere  desire  or  dictum.  It 
requires  a  positive  program  of  definite  and  direct  action.  These 
problems  are  not  going  to  be  settled  by  any  high-sounding 
theory.  First,  there  must  be  some  man  or  some  set  of  men 
who  will  get  together  and  bestow  the  greatest  possible  intelli- 
gence to  work  out  the  industrial  difficulties  that  confront  us; 
and  second,  there  must  be  an  army  of  men  who  are  willing  to 
devote  themselves  to  hard  work  to  increase  production.  If  I 
were  to  seek  to  define  the  best  possible  service  that  could  be 
rendered  by  any  man  on  the  face  of  the  earth  today,  I  would 
say  it  would  be  the  service  rendered  by  that  man  who  had  the 
gift  of  persuasion  that  would  reach  around  the  world  and 
induce  men  everywhere  to  devote  themselves  to  their  utmost 
capacity  to  increase  the  production  of  the  earth.  [Applause.] 
I  thank  you.  [Applause.] 


PRESIDENT'S  ANNUAL  ADDRESS 


PRESIDENT'S  ANNUAL  ADDRESS 

Presented  by   MR.  BULKELEY  WELLS,   President   of  The  American 

Mining  Congress,  Before  the  Twenty-second  Annual  Convention, 

St.  Louis,  Mo.,  November  17,  1919 

Your  secretary  will  presently  report  to  you  in  detail  the 
aims,  activities  and  achievements  of  The  American  Mining 
Congress  during  the  past  year.  You  will  be  agreeably  sur- 
prised to  learn  how  steadily  the  Congress  has  developed  in 
membership,  in  strength,  in  influence  and  in  effective  organiza- 
tion of  its  work.  You  will  justly  attribute  these  results  to  the 
untiring  efforts  of  your  secretary,  Mr.  Callbreath,  and  the 
active  staff  of  your  organization.  The  subjects  listed  for  dis- 
cussion in  the  official  program  indicate  how  widely  diversified 
the  activities  of  the  Congress  have  become.  To  attempt  to 
discuss,  even  briefly,  all  of  these  matters  would  involve  a 
longer  address  than  I  feel  justified  in  imposing  upon  you.  I 
shall,  therefore,  confine  myself  to  a  single  subject,  which  seems 
to  me  the  most  vital  of  the  many  that  require  your  earnest 
consideration. 

Importance  of  Conference 

Your  annual  Convention  has  advisedly  been  given  the  larger 
title  of  a  National  Industrial  Conference.  The  critical  condi- 
tions existing  today  in  the  industries  of  this  country  demand 
immediate  consideration  and  determined  action.  You  have 
assembled  from  many  and  distant  parts  of  this  country.  You 
represent  all  branches  of  the  mining  industry.  Various  locali- 
ties necessarily  present  varying  conditions  and  problems  re- 
quiring differing  solutions ;  but  there  are  certain  fundamental 
problems  that  affect  all  branches  of  the  industry  in  all  locali- 
ties. The  prompt  and  effective  solution  of  these  problems  is  a 
matter  of  vital  concern  to  all  the  people  of  this  country.  They 
will  await  with  keen  interest  and  anxiety  the  results  of  your 
deliberations.  They  may  reasonably  expect  that  you  will 
approach  these  problems  with  open  minds,  free  from  pre- 
conceived prejudice;  that  your  discussions  and  expressions  of 


240         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

opinions  will  be  guided  by  a  determination  to  do  equal  justice 
to  all;  and  that  your  conclusions  will  be  honestly  intended  to 
protect  and  promote  the  welfare  and  prosperity  of  our  people. 
Your  all-important  task  is,  therefore,  to  develop  a  plan  for  the 
readjustment  of  our  industrial  conditions  which  will  commend 
itself  to  both  employers  and  employees. 

In  labor  controversies  of  the  present  day  the  question  of 
wages  to  be  paid  is  rarely  the  determining  factor.  Conditions 
of  employment  and  control  of  methods  and  rate  of  production 
are  usually  more  difficult  to  adjust.  However  mistaken  the 
attitude  of  employers  toward  employees  may  have  been  in  the 
past,  no  intelligent,  reasoning  employer  will  attempt  today  to 
deal  other  than  fairly  with  his  employees,  whether  organized 
or  unorganized.  Labor  seems  to  fail  to  recognize  this,  either 
willfully  or  under  the  guidance  of  radical  leaders,  and  persists 
in  presenting  demands  which,  if  granted,  would  destroy  many 
of  the  industries  upon  which  it  depends  for  employment. 

Public  Sentiment  Controls 

Our  governmental  policies  will  vary  with  changing  adminis- 
trations, and  the  application  of  our  laws  with  the  characteristics 
of  those  elected  to  administer  them ;  but  public  sentiment  will 
forever  control  the  destiny  of  movements  which  affect  the 
good  of  the  greatest  number.  The  American  people  are  slow 
in  realizing  the  effect  of  radically  changed  industrial  condi- 
tions, but,  once  awakened,  they  speak  in  no  uncertain  terms, 
and  their  decision,  once  announced,  is  final.  The  outcome  of 
the  coal  strike  is  the  most  recent  and  positive  example  of  this. 
Had  the  public  indorsed  the  cause  of  the  strikers  instead  of  the 
procedure  of  the  Government,  the  strike  might  have  prevailed. 

There  are  no  sound  objections  to  so-called  "collective  bar- 
gaining," provided  the  conditions  surrounding  it  are  sound. 
Indeed,  it  furnishes  the  only  practical  method  of  dealing  with 
large  numbers  of  men.  But  the  parties  to  such  a  discussion 
of  wages  and  conditions  of  employment  must  actually,  and 
with  duly  conferred  authority,  represent  at  least  a  majority 
of  those  concerned,  and  must  be  firmly  and  equally  bound  in 
their  final  agreement.  Labor  organizations  should  be  com- 
pelled by  law  to  incorporate,  and  thus  become  as  legally  and 
financially  responsible  for  the  observance  of  their  contracts 


PRESIDENT'S  ANNUAL  ADDRESS  241 

as  are  employers.  The  assumption  and  exercise  of  power 
rightly  imply  equal  responsibility.  The  power  of  organized 
labor  to  do  good  and  to  do  harm  is  amply  proven,  but  the 
responsibility  for  harm  and  injustice  done  is  too  often  evaded. 
As  proof  of  the  sincerity  of  the  words  of  its  leaders,  organ- 
ized labor  should  emphatically  deny  the  assertion,  somewhat 
freely  made,  that  its  purpose  in  demanding  shorter  hours  of 
employment  is  to  limit  production.  Most  reasoning  employers 
will  no  longer  oppose  an  eight-hour  day ;  and  eight  hours'  work, 
with  eight  hours  for  recreation  and  eight  hours  for  sleep,  can 
hardly  justify  complaint  on  the  part  of  labor.  Fewer  hours 
of  employment  will  inevitably  increase  the  cost  of  all  products 
and  develop  indolence  and  extravagance  on  the  part  of  labor. 
There  is  but  one  fundamental  cure  for  the  high  cost  of  living — 
it  is  materially  increased  production. 

Capital  and  Labor  Interdependent 

Capital,  management  and  labor  are  interdependent.  No  one 
can  develop  a  successful  industry  without  the  other  two.  But 
radical  labor  denies  the  necessity  of  capital,  and  fails  to  accord 
to  management  the  credit  it  deserves  for  the  all-essential 
function  it  performs.  Yet  it  is  doubtful  if  anyone  works 
harder  than  the  managing  heads  of  our  industries,  who  set  no 
limit  to  their  hours,  whose  work  is  never  completed,  and  who 
carry  their  problems  and  worries  into  their  homes  and  into 
their  hours  of  supposed  recreation. 

Profit-sharing  is  offered  as  a  solution  of  the  wage  problem. 
It  can,  presumably,  be  adopted  in  a  well-established,  successful 
business,  but  it  cannot  be  equitably  applied  in  the  mining 
industry.  The  widely  varying  conditions  under  which  mining 
operations  are  conducted,  and  the  inherent  vicissitudes  of  the 
business,  render  a  uniform  wage  impossible  and  profits  uncer- 
tain. A  mine  may  this  year  earn  a  substantial  profit  and  next 
year  show  a  loss,  through  no  fault  of  its  management;  but 
labor  has  not  yet  proposed  to  share  such  losses  as  consideration 
for  sharing  in  profits  when  realized. 

Compulsory  arbitration  appears  to  be  opposed  by  both  em- 
ployers and  employees;  yet  our  courts  and  trials  by  jury  are, 
in  fact,  methods  of  compulsory  arbitration  in  all  matters  sub- 
ject to  our  duly  enacted  laws.  This  established  practice  may 


242         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

warrant  the  creation  of  State  Courts  of  Industry,  or  Industrial 
Commissions,  empowered  to  take  jurisdiction  over  labor  con- 
troversies, to  compel  arbitration,  and  to  enforce  their  decisions, 
subject  to  appeal  to  a  Federal  Court,  or  Commission,  com- 
parable to  our  Supreme  Court.  I  realize  that  many  employers, 
and  probably  all  labor  organizations,  would  oppose  such  a  plan, 
but  what  surer  or  more  natural  solution  can  be  offered?  The 
present  coal  strike  has  demonstrated  that  a  method  must  be 
developed  for  dealing,  legally  and  promptly,  with  such  a  crisis 
in  our  industries.  In  all  other  matters  we  submit  to  the  ver- 
dict of  our  fellow-men.  If  we  deal  fairly  with  one  another, 
we  may  confidently  expect  to  be  judged  fairly.  We  shall  all 
have  our  "day  in  court,"  but,  whether  we  are  employers  or 
employees,  it  should  prove  a  sorry  day  for  us,  if  our  cause  is 
not  just. 

Spirit  of  Anarchy 

To  serve  one's  country  in  war  has  ever  been  held  to  be  com- 
mendable performance  of  a  recognized  duty.  Yet  a  few  days 
ago  men  who  had  so  served  were  shot  down  in  the  light  of 
day  in  an  American  city  because  they  had  dared  to  express 
their  opposition  to  a  movement  which  openly  threatens  to  over- 
throw the  Government  these  men  risked  their  lives  to  defend. 
It  may  be  comforting  to  urge  that  this  was  but  an  isolated 
outburst  of  a  spirit  of  anarchy  which  we  must  expect  to  experi- 
ence occasionally  in  so  mixed  a  population  as  this  country 
possesses.  But  other  incidents  less  startling  but  amply  con- 
vincing force  the  realization  that  an  organized  and  alarmingly 
widespread  conspiracy  has  been  permitted  to  develop  through 
our  indifference  and  the  reluctance  of  our  officials  to  act  vigor- 
ously, restrained  by  the  consideration  of  mere  political  expe- 
diency. We  have  but  recently  expended  our  billions  and  given 
our  sons  to  prove  that  the  true  citizens  of  this  country  are 
not  devoted  solely  to  the  acquisition  of  wealth,  but  are  as 
ready  today  to  give  their  all,  freely  and  bravely,  in  a  just 
cause  as  were  their  forefathers  in  other  days.  Having  given 
this  proof,  shall  we  now  sit  supinely  by  while  our  Government 
is  undermined  and  our  wisely  established  institutions  attacked? 


PRESIDENT'S  ANNUAL  ADDRESS  243 

Warning  to  Reds 

We  are  a  peace-loving,  law-abiding  people,  with  an  enduring 
faith  in  the  justice  of  our  form  of  government;  but  let  the 
radicals,  the  anarchists  and  the  "Reds"  beware  the  day  when, 
our  sorely  tried  patience  exhausted,  we  rise  in  our  offended 
might  and  destroy  them.  If  these  professed  opponents  of  all 
government  dare  to  claim  the  right  to  live  in  this  country, 
they  must  become  citizens  and  conduct  themselves  as  citizens, 
with  full  observance  of  our  laws.  If  they  violate  these  con- 
ditions, they  prove  themselves  to  be  worse  than  alien  enemies 
and  should  be  deported. 

There  are,  concededly,  features  of  our  industrial  life  that 
require  correction  and  improvement;  but  these  must  come 
through  peaceful,  practical  evolution,  not  through  red  revolu- 
tion. The  oft-used  phrase  "America  for  Americans"  proclaims 
a  fervent  spirit  of  patriotism,  but  its  full  meaning  and  pro- 
tection can  be  attained  only  if  Americans  are  first,  last  and  all 
the  time  for  America. 


244         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY 

Address  by  DR..  VAN   H.  MANNING,   Director  of  the  United  States 

Bureau  of  Mines,  Before  The  American  Mining  Congress, 

St.  Louis,  Mo.,  November  17,  1919 

It  is  a  pleasure  to  be  again  in  the  city  of  St.  Louis  and  to 
speak  before  The  American  Mining  Congress,  for  my  memory 
at  once  brings  back  vividly  the  days,  15  years  ago,  when  my 
honored  late  chief,  Dr.  J.  A.  Holmes,  was,  with  the  help  of  his 
colleagues,  Messrs.  Campbell  and  Parker,  beginning  here  in  St. 
Louis  the  fuel-testing  work  in  connection  with  the  Louisiana 
Purchase  Exposition  that  led  to  the  creation,  first  of  a  tech- 
nologic branch  and  later  to  the  establishment  of  the  Bureau 
of  Mines,  of  which  he  was  the  first  director,  and  the  memory 
of  his  wise  leadership  and  far-seeing  vision  will  always  be 
an  inspiration.  I  remember,  too,  that  two  years  previous  to 
that  he  had  been  chairman  of  the  Committee  on  Permanent 
Organization  of  the  International  Mining  Congress,  as  it  was 
then  known,  when  it  met  at  Butte  in  August,  1902,  to  devise 
some  means  by  which  its  work  could  be  made  of  greater  value 
to  the  mining  industry  and  lay  down  the  basis  of  a  permanent 
organization  toward  that  end.  The  Bureau  of  Mines  and  The 
American  Mining  Congress,  therefore,  both  owe  to  this  great 
man  the  formulation  of  wise  policies  and  the  outlining  of  great 
aims  that  have  borne  fruit  in  the  continued  growth  and  greater 
usefulness  of  them  both.  They  are  linked  together,  too,  in  the 
undoubted  fact  that  the  resolutions  passed  at  the  meeting  in 
Butte,  as  well  as  in  preceding  and  later  meetings,  stating  that 
on  account  of  the  importance  to  the  country  of  the  mineral 
industry  a  Federal  Department  of  Mines  and  Mining  should  be 
created,  greatly  facilitated  the  securing  of  the  appropriations 
that  made  possible  the  establishment  of  the  Bureau  of  Mines 
in  1910. 

Growth  of  Mining  Bureau 

When  I  have  appeared  before  you  in  former  years  it  has  been 
my  custom  to  speak  to  you  briefly  of  the  work  of  the  Bureau  of 
Mines,  but  I  no  longer  feel  that  that  is  necessary.  In  the  past 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        245 

decade  the  aid  given  by  the  Federal  Government  toward  the 
encouragement  of  the  mining  industry  has  so  far  justified 
itself  that  the  Bureau  has  been  able  to  extend  its  work  through- 
out the  mining  districts  of  the  country,  and  what  it  has  been 
doing  is  doubtless  known  to  you  through  personal  contact  with 
its  agencies.  I  say  this  the  more  confidently  because  of  the 
cordial  co-operation  the  Bureau  has  received  from  the  men  of 
the  mining  industry.  It  cannot  be  necessary,  therefore,  to  ex- 
plain and  define  the  Bureau  in  the  house  of  its  friends,  and  I 
want  to  draw  to  your  attention  a  few  of  the  main  general  prob- 
lems that  confront  the  mining  industry  and  to  indicate  what 
in  my  judgment  seems  to  be  the  most  desirable  way  in  which 
their  solution  should  be  attempted. 

Threatened  Coal  Strike 

We  are  confronted  today  with  what  is  perhaps  the  most 
serious  industrial  trouble  that  the  United  States  has  ever  had. 
I  refer  of  course  to  the  coal  strike.  It  is  not  my  purpose  to 
attempt  any  discussion  of  the  merits  or  demerits  of  the  case  of 
either  side  of  the  controversy,  and  I  hope,  with  you  all,  that  the 
dispute  will  be  settled  soon ;  but  since  it  is  the  function  of  the 
Bureau  of  Mines  to  foster  the  mining  industry,  I  feel  it  my 
duty  to  discuss  one  problem  which  has  concerned  both  the 
miners  and  the  operators  in  the  past,  and  that  is  the  frequent 
periods  in  which  the  bituminous  mines,  especially  in  the  spring 
and  summer  months,  are  not  at  work  from  causes  not  under 
the  control  of  either  the  operator  or  the  miner.  As  you  are 
aware,  these  unwelcome  shut-downs  constitute  a  considerable 
percentage  of  the  possible  number  of  working  days  in  a  year, 
and  thus  seriously  affect  the  gross  income  of  both  the  miner 
and  the  operators,  since  each  suffers  a  loss  whenever  the  mine 
stands  idle.  Unfortunately  the  roof  does  not  stand  idle — it 
falls  and  must  be  timbered,  and  water  enters  the  mine  and 
must  be  pumped  out.  These  and  other  necessary  operations 
cause  a  loss  for  which  there  is  no  compensation. 

Idleness  of  Miners 

In  the  five-year  period,  1912  to  1916,  the  time  worked  in  the 
bituminous  mines  ranged  from  195  to  232  days  of  a  possible 
310  working  days.  In  1917  the  mines  worked  243  days,  and 


246         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

in  1918,  under  the  abnormal  war  conditions,  249  days.  In 
round  figures,  the  mines  are  idle  for  one-third  to  one-fourth  of 
the  time  in  ordinary  years.  The  reason  is  well  known  to  you 
that  bituminous  mines  are  opened  and  manned  on  the  basis  of 
the  maximum  or  winter  output,  which  in  large  part  arises  be- 
cause consumers  reduce  their  purchase  of  coal  in  the  spring 
and  summer  months. 

Although  some  bituminous  coal  does  not  stock  well,  yet  there 
are  ways  and  means  by  which  this  can  be  done,  but  it  requires 
careful  storage,  and  the  storing  and  rehandling  cost  money. 
The  trouble  is  that  the  consumer  does  not  perceive  the  cost  of 
this  to  himself.  He  thinks  to  himself  it  is  all  right  for  Mr. 
Jones  to  buy  his  coal  early  and  in  this  way  help  out  the  miners, 
but  it  is  going  to  be  inconvenient  for  him  to  tie  up  his  money 
so  far  in  advance,  and  so  does  not  order  coal  early  in  the  season. 
It  must,  therefore,  be  made  worth  while  to  the  consumer  from 
a  money  standpoint.  If  a  business  firm  uses  a  thousand  tons 
of  coal  per  year  and  could  save  a  thousand  dollars  by  buying 
early,  is  it  not  likely  that  it  would  make  its  purchases  early, 
although  it  might  have  to  spend  half  of  this  amount  in  re- 
handling?  On  the  other  hand,  it  would  be  a  further  advantage 
to  the  company  to  know  that  it  would  have  its  supply  of  coal 
on  hand  when  the  winter  storms  tie  up  the  railroads. 

Summer  Rates  Proposed 

Since  Congress  has  prevented  by  law  agreement  among 
operators  as  to  price,  it  becomes  impossible  for  them  to  take 
care  of  this  situation  by  agreeing  to  sell  their  coal  for  ma- 
terially less  in  summer  and  making  it  up  in  winter.  It  has  been 
suggested  that  this  could  be  taken  care  of  through  the  Govern- 
ment establishing  summer  and  winter  rates  on  coal,  so  fixed 
that  there  would  be  no  loss  of  net  revenue  at  the  end  of  the 
year;  or,  still  better,  establishing  a  sliding  scale  that  would 
produce  an  equalization  of  coal  purchases  and  shipments 
through  all  the  months  of  the  year. 

The  effect  of  this  would  be  that  the  miners  would  have  steady 
work  and  there  would  be  readjustment  by  which  fewer  mines 
could  furnish  the  total  amount  of  coal  needed.  This  would  not 
necessarily  mean  the  shutting  down  of  mines,  for  coal  produc- 
tion in  1918  was  113,000,000  tons,  or  20  per  cent,  greater  than 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        247 

in  1913,  and  if  new  mines  were  not  opened  for  a  while  produc- 
tive capacity  would  quickly  become  adjusted  to  consumption. 
Fewer  miners  would  be  required,  and  we  would  have  the  advan- 
tageous condition  in  this  country  which  prevailed  in  Europe 
before  the  war,  where  the  miners  worked  practically  every 
working  day  in  the  year  and  the  operators  were  able  to  count 
on  a  regular  output. 

Coal  Export  Movement 

The  coal  industry  of  the  country  will  be  greatly  benefited  by 
a  good  export  business.  Those  of  you  who  have  mines  far 
away  from  the  Appalachian  field,  which  is  chiefly  drawn  upon 
for  the  export  business,  may  consider  that  you  are  not  inter- 
ested in  it.  You  are,  nevertheless,  for  some  of  the  coal  that  has 
heretofore  competed  with  coal  produced  in  the  West  will  thus 
be  diverted  to  the  overseas  markets. 

Considerable  amounts  of  coal  have  been  exported  to  Canada, 
but  this  is  similar  in  many  ways  to  domestic  business.  We 
have  never  had  a  large  export  coal  business  before  because 
Great  Britain,  through  its  dominant  position  in  shipping,  had 
the  lion's  share  of  the  business.  But  England  has,  temporarily 
at  least,  lost  the  larger  part  of  its  coal  export  business  through 
curtailment  of  production,  resulting  from  reduction  in  the 
hours  of  labor  of  the  miners.  The  United  States  coal  export 
trade  should  be  placed  by  its  own  great  shipping  facilities  on  a 
firm  basis  where  it  can  compete  on  even  or  better  terms  because 
of  our  more  easily  and  cheaply  mined  coal.  It  is  probable  that 
the  Mediterranean  and  South  American  regions  will  look  to  the 
United  States  for  their  coal  supplies.  The  export  business, 
while  at  present  extremely  attractive  on  account  of  high  prices, 
has  most  serious  disadvantages  for  the  individual  operator 
because  of  the  problem  of  arranging  for  ships,  taking  care  of 
demurrage,  and  determining  the  responsibility  of  purchasers. 
Certain  large  operating  companies,  long  established  in  the 
export  business,  can  perhaps  take  care  of  this  situation  for 
themselves.  On  the  other  hand,  they  are  deeply  concerned  in 
the  present  situation,  because  in  the  scramble  for  business 
irresponsible  agencies  have  placed  orders  for  coal  utterly  un- 
suited  to  the  European  market  and  in  certain  instances  of  very 
bad  quality,  thus  seriously  damaging  the  reputation  of  Ameri- 


248         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

can  coal.  While  the  present  acute  scarcity  of  coal  in  Europe 
prevails  this  perhaps  would  not  prove  an  obstacle  to  doing 
some  business,  but  in  the  long  run  it  will  have  a  serious  effect 
on  all  companies,  both  large  and  small. 

Mining  Congress  Committee 

There  are  other  difficulties  at  the  present  time,  less  acute 
now  than  they  will  perhaps  be  in  the  future,  when  foreign 
purchasers  may  combine  to  play  one  American  producer  off 
against  another.  I,  therefore,  conclude  that  the  Government 
has  wisely  put  into  the  hands  of  the  operators,  through  the 
Webb-Pomerene  Act,  an  opportunity  for  handling  export  busi- 
ness through  a  corporation  by  means  of  which  operators  who 
export  coal  can  dispose  of  their  coal  to  the  best  advantage.  I 
am  gratified  that  The  American  Mining  Congress  has  followed 
this  matter  up,  both  for  the  general  good  of  the  industry  and 
to  insure  that  the  standards  of  American  coal  shall  be  main- 
tained. I  will  not  enter  here  into  the  details  of  how  these 
standards  can  best  be  maintained;  that  is  being  discussed  in 
your  technical  proceedings,  but  in  general  it  seems  clear  that 
the  same  methods  which  have  proved  so  advantageous  in  get- 
ting the  best  fuel  for  the  Navy  and  the  Panama  Canal  must  be 
followed,  and  that  a  method  of  placing  the  export  coal  into 
pools  and  maintaining  their  high  grade  by  a  proper  system  of 
inspection  and  sampling  is  the  only  logical  way  to  obtain  coal 
which  will  be  as  well  standardized  in  the  ocean  trade  as  is  the 
Cardiff  smokeless  coal  and  the  Durham  coking  coal. 

The  coal  export  business  is  made  up  of  five  phases : 

(1)  Production  at  the  mine. 

(2)  Transportation  to  the  seaboard. 

(3)  Dumping  at  the  loading  piers. 

(4)  Ocean  transportation. 

(5)  Unloading,  and  storage  if  necessary,  at  the  foreign  port. 

Those  new  to  the  business  have  already  found  serious  diffi- 
culties. While  the  selling  price  in  France,  something  like  $35 
per  ton,  sounds  large,  yet  when  you  consider  that  90  per  cent, 
of  this  represents  freight  to  the  point  of  shipment,  insurance, 
demurrages  and  unloading  charges,  all  of  which  must  be  ad- 
vanced in  addition  to  the  cost  of  producing  the  coal  at  the  mine, 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        249 

it  makes  coal  exporting  more  of  a  banking  business  than  a  coal- 
production  business.  I,  therefore,  strongly  advocate  the  taking 
over  of  the  business  by  an  export  company  which  will  represent 
the  exporting  operators  of  the  United  States,  or  at  least  a  con- 
siderable portion  of  them,  and  with  the  sanction  of  the  Govern- 
ment under  the  Webb-Pomerene  Act  will  protect  the  American 
industry  through  maintaining  coal  prices,  keeping  up  the 
standards  of  American  coal,  affording  an  additional  outlet  for 
our  coal  and  incidentally  helping  Europe  and  South  America 
by  providing  urgently  needed  fuel. 

Export  Might  Relieve 

It  may  be  further  pointed  out  that  the  high  peak  of  produc- 
tion for  export  business  would  probably  come  in  the  summer 
months  when  most  needed  to  give  the  miners  work  and  the 
operators  increased  business,  thus  helping  to  solve  the  problem 
which  I  discussed  in  the  beginning. 

I  cannot  overlook  this  occasion  to  call  your  attention  to  a 
situation  that  now  exists  regarding  the  international  policies 
in  the  development  of  the  mineral  resources  of  the  nations  of 
the  world.  A  number  of  countries  have  recently  inaugurated 
policies  tending  toward  the  exclusion  of  other  than  their  own 
nationals  in  the  acquisition  of  mineral  resources,  more  particu- 
larly oil,  within  their  own  domains  and  spheres  of  influence. 
This  is  a  situation  in  which  all  Americans  should  interest  them- 
selves and  in  which  The  American  Mining  Congress  should  be 
particularly  concerned. 

International  Policies 

There  are  two  phases  of  the  situation — one  with  reference  to 
the  larger  nations,  the  other  with  reference  to  the  smaller 
nations.  Mining  men  are  more  or  less  familiar  with  the  situ- 
ations that  exist  in  Latin-American  countries.  It  is  probably 
not  as  well  understood  that  the  stronger  nations  have  instituted 
policies  which  will  exclude  Americans  from  acquiring  holdings 
in  their  domains  or  spheres  of  influence  on  a  scale  that  will 
encourage  our  nationals.  These  policies  have  been  the  out- 
growth of  the  recent  war  and  the  intense  nationalism  which 
has  been  accentuated  by  the  struggle  for  existence  which  the 
nations  have  undergone.  As  a  result,  we  find  that  each  nation 


250         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

manifests  a  desire  to  meet  its  own  needs  first,  and  these 
desires  are  being  pushed  in  a  manner  that  is  both  shortsighted 
and  in  the  end  will,  in  my  opinion,  react  upon  itself. 

Petroleum  Situation 

This  policy  has  been  centered  around  the  petroleum  situation 
because  the  war  has  brought  home  to  every  nation  the  vital 
importance  of  petroleum  in  war  and  in  peace.  Petroleum  as  a 
source  of  motor  fuel,  as  a  source  of  the  only  lubricant  which 
can  be  practically  obtained  in  sufficient  quantities,  and  as  a 
need  for  the  marine  of  the  world,  both  naval  and  merchant,  is 
becoming  one  of  the  primary  necessities,  militarily  and  indus- 
trially, of  our  modern  world.  Up  to  the  present  time,  the 
United  States  has  been  in  a  dominant  position  as  far  as  petro- 
leum resources  are  concerned,  and  has  produced  from  60  to  70 
per  cent,  yearly  of  the  world's  total  supply,  but,  likewise,  the 
United  States  with  its  industrial  life  premised  upon  the  pro- 
ductivity of  each  man  being  multiplied  by  the  use  of  machinery, 
has  come  to  be  a  consumer  of  petroleum  and  its  products  in 
greater  proportion  than  its  actual  production.  We  can  no 
longer  meet  our  domestic  demands  from  domestic  resources, 
and  our  best  engineering  talent  tells  us  that  looking  both  from 
a  question  of  supply  and  from  the  question  of  demand  the  situa- 
tion will  grow  progressively  more  critical  until  such  time  as  the 
oil  shales  of  the  West  can  be  developed  on  large  scale  and  in 
commercial  competition  with  the  oil  fields,  not  only  of  the  West, 
but  in  the  world  without  the  confines  of  our  United  States. 

We  find  ourselves,  therefore,  compelled  to  go  abroad  for  in- 
creasing proportion  of  our  oil  needs.  We  are  importing  an 
increasing  amount  of  crude  oil  from  Mexico;  we  are  desirous 
of  extending  our  internal  consumption  of  oil  for  all  purposes 
and  we  are  endeavoring  to  build  up  a  merchant  marine  which 
we  are  told  can  compete  with  the  marine  of  other  nations  only 
by  the  use  of  fuel  oil.  We  are  in  danger,  therefore,  of  finding 
that  the  margin  of  needs  over  domestic  supplies  cannot  be 
obtained  from  our  own  nationals  abroad,  but  only  from  our 
commercial  and  political  rivals,  if  these  policies  which  are  likely 
to  prevent  our  nationals  from  entering  into  and  exploiting 
foreign  supplies  are  persisted  in. 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        251 

Encouraging  Outside  Capital 

It  has  always  been  the  policy  of  America  to  encourage  foreign 
capital  to  enter  freely  and  for  foreign  companies  to  acquire 
holdings  in  the  United  States  on  a  parity  with  our  own 
nationals.  I  believe  in  this  policy.  I  believe  that  in  the  long 
run  this  country  will  benefit  more  by  such  a  policy  than  by 
endeavoring  to  restrict  all  the  benefits  to  ourselves.  I  believe 
that  the  policy  of  national  selfishness  is  shortsighted  and  may 
lead  to  serious  international  complications,  and  in  the  long  run 
this  country  will  benefit  more  by  having  reasonable  exchange 
of  opportunities  between  ourselves  and  other  nations.  I  believe 
that  the  exclusion  policy  is  shortsighted  on  the  part  of  those 
nations  that  have  initiated  it,  for,  if  persisted  in,  I  am  of  the 
opinion  that  public  sentiment  will  demand  that  the  nationals 
of  such  countries  be  excluded  from  our  mineral  resources  to  the 
same  extent  that  they  exclude  our  citizens.  I  believe  that  if  this 
tendency  of  erecting  a  Chinese  Wall  around  each  country  is 
universally  adopted,  the  United  States  will  suffer  probably  less 
than  any  other  country,  for  it  has  within  itself  resources  that 
make  it  the  most  nearly  self-sufficient.  For  many  resources  it 
has  such  an  overwhelming  superiority  that  other  countries  are 
more  dependent  upon  us  than  we  are  upon  them.  However,  the 
United  States  is  in  better  position  to  bring  this  fact  home 
clearly  now  than  probably  it  ever  will  be  again  in  the  future. 
It  would  be  unfortunate  if,  because  of  inaction  on  our  part 
now,  these  intense  nationalistic  tendencies  of  other  nations  are 
allowed  to  crystallize  into  fixed  policies  that  cannot  be  changed. 
It  would  be  deplorable  if  the  situation  develops  to  such  an 
extent  that  we  are  forced  to  retaliate  and  exclude  the  nationals 
of  other  countries  from  acquiring  mineral  holdings  in  the 
United  States ;  therefore,  I  commend  to  The  American  Mining 
Congress  a  policy  of  urging  a  reciprocity  that  will  place  our 
citizens  upon  a  parity  with  other  nationals  in  the  exploitation 
of  the  universal  resources  of  the  world. 

Petroleum  Investigations 

Turning  now  to  problems  at  home,  there  are  so  many  matters 
that  require  investigation  in  the  petroleum  industry  that  it  is 
difficult  to  select  those  of  the  greatest  importance.  The  petro- 
leum industry  has  been  backward  in  the  application  of  modern 


252         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

scientific  and  engineering  principles  and  in  this  respect  is  many 
years  behind  the  metal-mining  industries.  Some  of  the  prob- 
lems that  I  might  mention  are:  engineering  studies  of  all  oil 
fields,  making  of  maps  and  cross  sections,  which  would  give  the 
operator  information  on  the  source  of  water,  where  to  shut  it 
off,  how  his  wells  should  be  cased,  and  many  similar  factors. 
Another  investigation  of  the  first  magnitude  is  means  for  ex- 
tracting more  oil  from  the  oil  sands.  Probably  not  more  than 
10  to  20  per  cent,  of  the  oil  that  exists  in  the  sand  is  brought  to 
the  surface. 

The  mechanical  equipment  for  well-drilling  and  petroleum 
production,  particularly  the  latter,  gives  rise  to  many  problems 
that  should  be  solved.  In  drilling  wells  the  casing  is  a  source 
of  enormous  expense,  and  investigations  should  be  made  to- 
ward reducing  the  amount  of  casing  required  for  a  well.  In 
many  oil  fields,  also,  corrosive  waters  soon  destroy  the  casing 
and  tubing. 

The  refining  of  oil  still  offers  a  tremendous  field  for  investi- 
gation, even  though  more  scientific  engineering  ability  has 
probably  been  expended  in  this  end  of  the  industry  than  in  the 
production.  Recent  investigations  of  the  Bureau  of  Mines  have 
shown  that  great  fuel  economies  can  be  effected  in  the  ordinary 
refinery.  In  my  opinion,  the  manufacture  of  crude  petroleum 
into  its  various  products  should  really  be  considered  a  chemical 
industry.  Crude  oil  is,  after  all,  a  crude  chemical  and  consid- 
ering it  from  this  standpoint  there  is  practically  no  limit  to  the 
development  of  the  manufacture  of  petroleum  products. 

Fuel  Investigation 

In  the  utilization  of  fuel  oil  there  is  an  unlimited  field  of 
investigation.  Though  petroleum  is  the  cheapest  of  combustible 
liquids,  its  peculiar  properties  should  be  utilized  to  the  fullest 
extent,  and  it  should  not  be  used  in  direct  competition  with  coal 
and  other  fuels  that  are  more  abundant.  Petroleum  products 
should  not  be  burned  for  direct  heating  purposes,  as  under  a 
boiler,  except  under  extraordinary  circumstances.  The  exten- 
sive use  of  fuel  oil  for  steam  raising  should  be  discouraged, 
since  the  thermal  efficiency  obtained  is  only  10  to  15  per  cent, 
in  the  average  steam  plant,  whereas  in  internal  combustion 
engines  from  30  to  36  per  cent,  can  be  obtained.  The  internal 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY         253 

combustion  type  of  engine  for  the  heavy  petroleum  products, 
which  constitute  about  57  per  cent,  of  the  petroleum  in  the 
United  States,  should  be  developed  so  as  to  use  this  ideal  fuel 
in  a  more  efficient  way.  At  the  present  time  fuel  oil  is  the  chief 
concern  of  the  refiner  and  is  sold  at  an  actual  loss  in  most  cases, 
for  a  gallon  of  fuel  oil  in  most  fields  sells  for  less  than  a  gallon 
of  the  crude  oil  from  which  it  has  been  obtained.  The  question 
of  obtaining  more  gasoline  for  the  increasing  number  of  auto- 
mobiles, trucks,  tractors,  etc.,  is  also  a  great  problem.  It  does 
not  seem  as  if  we  can  distill  a  much  greater  portion  from  crude 
oil,  because  we  have  already  encroached  upon  the  kerosene  frac- 
tions to  such  an  extent  that  it  is  likely  that  an  economic  equi- 
librium between  the  prices  of  the  two  products  will  soon  be 
reached.  More  gasoline  can  be  obtained  by  cracking  fuel  oil, 
but  it  seems  to  me  more  desirable,  if  it  can  be  done,  to  develop 
internal  combustion  engines  that  will  use  the  fuel  oil  directly 
without  cracking  it.  For  a  gallon  of  fuel  oil  so  used  we  get 
about  30  to  35  per  cent,  thermal  efficiency,  whereas  the  same 
gallon  of  fuel  oil  if  manufactured  into  gasoline  yields  only  20 
or  25  per  cent,  thermal  efficiency  and  the  cost  of  producing  the 
gasoline  is  considerable. 

Oil  Shale  Development 

The  development  of  the  oil  shales  is  also  a  problem  of  the 
first  magnitude.  It  is  probable  that  sooner  or  later  we  must 
fall  back  upon  this  source  of  supply,  and  we  should  take  steps 
to  find  out  at  the  earliest  opportunity  how  the  oil  from  these 
shales  may  be  best  obtained,  whether  they  can  be  obtained 
profitably  at  the  present  time  and  if  not  under  what  conditions 
their  exploitation  can  be  made  profitable. 

Perhaps  the  largest  problem  of  all  is  the  development  of  com- 
petent engineers  and  technologists  to  solve  these  questions. 
Along  some  lines  capable  engineers  have  been  developed,  but 
along  others  they  are  woefully  lacking.  This  is  particularly 
true  in  production,  and  there  is  need  for  the  trained  engineer 
who  is  willing  to  go  into  the  oil  fields  and  acquire  first-hand 
experience  of  the  practical  side  of  the  business.  This  is,  I  am 
confident,  one  of  the  biggest  openings  for  engineers  and  will 
be  of  the  most  benefit  to  the  industry.  The  engineer  who  tries 
to  work  into  the  oil  industry  from  the  top  is  not  the  one  who  is 


254         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

going  to  meet  the  needs  of  the  situation.  On  the  other  hand, 
there  is  need  for  an  awakening  upon  the  part  of  the  oil  industry 
as  to  the  possibilities  of  practical  application  of  scientific  engi- 
neering ability  in  the  oil  fields.  I  do  not  say  this  as  a  criticism, 
for  the  practical  oil  operator  has  accomplished  wonders  for 
himself,  and  if  he  has  not  taken  engineering  sufficiently  into 
consideration  this  is  largely  because  there  have  not  been  engi- 
neers available  who  were  competent  to  reduce  his  oil-field 
problems  to  a  practical  engineering  basis. 

Mining  Bureau  Branches 

In  the  field  of  mineral  mining  proper  the  problems  are  so 
many  and  so  varied  that  for  brevity's  sake  I  will  merely  refer 
to  some  of  the  principal  lines  of  work  now  in  progress  at  the 
11  mining  experiment  stations  of  the  Bureau.  At  Pittsburgh, 
the  largest  of  the  stations,  the  work  has  to  do  principally  with 
the  mining,  beneficiation  and  utilization  of  coal.  There  are 
many  ramifications  of  this  work  for  the  benefit  of  the  coal- 
mining industry.  For  example,  the  work  of  the  Pittsburgh 
station  is  sub-divided  into  the  following  sections :  Coal  Mining 
Section,  Mine  Safety  Section,  Fuels  Section,  Electrical  Section, 
Mechanical  Section  and  Chemical  Section. 

The  mere  mention  of  the  names  of  these  sections  will  give 
you  some  idea  of  the  nature  and  diversity  of  the  work  required 
to  meet  the  many  problems  which  at  the  present  time  have  to 
be  considered  in  connection  with  the  coal-mining  industry. 
Local  coal-mining  problems  are  being  studied  at  the  Seattle 
(Washington)  Station.  At  the  Urbana  (Illinois)  Station  still 
other  phases  of  the  problem  are  considered,  such  as  mine  sub- 
sidence, mine  fires,  coal  washing  and  the  utilization  of  local 
coals.  At  Bartlesville,  Okla.,  and  San  Francisco,  Cal.,  the 
problems  of  the  petroleum  industry  mentioned  above  are  being 
actively  studied. 

State  Co-operation 

At  the  stations  located  at  Berkeley,  California ;  Golden,  Colo- 
rado; Tucson,  Arizona;  Salt  Lake  City,  Utah:  Minneapolis, 
Minnesota,  and  Seattle,  Washington,  the  various  problems 
which  arise  in  the  mining  and  treatment  of  the  ores  which 
occur  in  these  regions  are  considered  and  dealt  with  to  the 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        255 

extent  of  the  Bureau's  ability,  which  is,  of  course,  greatly 
limited  by  the  fact  that  the  appropriations  for  these  stations 
are  comparatively  small.  It  is  not,  therefore,  possible  for  the 
Bureau  to  undertake  research  and  investigational  work  upon 
the  same  scale  as  can  be  undertaken  by  the  larger  commercial 
concerns. 

For  this  reason  in  all  its  work  the  Bureau  is  endeavoring  to 
co-operate  first  with  any  State  agencies  that  may  have  been 
established  for  carrying  on  work  similar  to  that  being  carried 
on  by  the  Bureau,  for  I  believe  that  the  best  way  to  attack  the 
mining  and  metallurgical  problems  of  a  State  is  through  such 
State  agencies,  wherever  established.  For  this  reason  the 
Bureau's  field  stations  have  been  located  at  State  institutions 
with  the  exception  of  Pittsburgh,  Bartlesville  and  Fairbanks, 
Alaska.  At  Pittsburgh  the  Bureau  has  for  years  actively  co- 
operated with  the  Carnegie  Institute  of  Technology  and  has  in 
turn  been  greatly  assisted  by  this  institution  and  by  other 
institutions  of  the  City  and  State. 

Of  the  ten  stations  authorized  under  the  Foster  bill,  passed 
by  Congress  March  15,  1915,  six  have  been  started  and  four 
yet  remain  to  be  established.  When  Congress  grants  the  appro- 
priation necessary  for  the  maintenance  of  these  four  additional 
stations  an  endeavor  will  be  made  to  locate  them  in  that  part 
of  the  country  where,  it  is  believed,  they  will  best  serve  the 
mining  and  metallurgical  industry.  Up  to  the  present  time  it 
has  not  been  possible  for  the  Bureau  to  give  to  non-metallic 
minerals  the  attention  they  deserve.  It  is,  therefore,  expected 
that  one  of  the  new  stations  will  be  a  non-metallic  station. 

Mineral  Research 

The  non-metallic  minerals  form  a  field  for  research  and  in- 
vestigation, the  importance  of  which  is  often  not  fully  appre- 
ciated. The  problems  in  this  field  are  many  and  varied,  though 
perhaps  more  elemental  than  in  the  metal  mining,  for  but  little 
technical  work  has  been  done  here  by  mining  men.  But  during 
&nd  since  the  war  the  great  importance  of  the  non-metallic 
minerals  has  begun  to  be  realized  and  it  is  probable  that  a  new 
«ra  of  research  is  about  to  begin.  To  those  not  closely  familiar 
with  this  group  of  minerals  the  great  lack  of  even  fundamental 
information  can  scarcely  be  realized.  Little  technical  literature 


256         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

exists  and  comparatively  few  consulting  engineers  can  be  found 
who  can  bring  both  knowledge  and  experience  to  bear  on  tech- 
nical problems  in  such  minerals  as  clay,  cement,  gypsum,  talc, 
mica  and  fluorspar. 

The  Bureau  of  Mines  has  long  realized  the  importance  of 
work  in  this  field  and  has  already  published  bulletins  and  tech- 
nical papers  dealing  with  feldspar,  kaolin,  fuller's  earth, 
marble,  sandstone,  salt  and  gypsum  that  cover  the  subjects  in  a 
preliminary  way.  Under  the  War  Minerals  Investigations  and 
its  outgrowth,  Minerals  Investigations,  specialists  were  as- 
signed to  many  of  the  most  important  of  the  non-metallic  sub- 
stances and  a  foundation  was  laid  for  more  detailed  work.  But 
the  appropriation  for  this  work  was  not  renewed  for  the  cur- 
rent fiscal  year  and  most  of  the  new  work  was  necessarily  dis- 
continued. However,  the  records  have  been  maintained  and  a 
comprehensive  program  of  necessary  work  in  non-metallics 
is  being  prepared.  The  enthusiastic  attitude  of  the  industries 
concerned  toward  further  growth  of  this  part  of  the  Bureau's 
work  is  ample  proof  of  the  real  need.  It  is  to  be  hoped  that,  in 
addition  to  Bureau  investigations,  work  by  private  companies, 
research  laboratories  and  consulting  engineers  will  become  in- 
creasingly important. 

Working  Out  Many  Problems 

The  following  problems  have  been  suggested :  The  elimina- 
tion or  utilization  of  waste  in  stone-quarrying,  particularly 
slate,  marble  and  granite ;  the  substitution  of  dolomite  for  mag- 
nesite  refractories;  methods  of  mining  and  milling  talc  and 
soapstone;  raw  materials  used  in  glass  manufacture;  mining 
and  milling  of  graphite ;  natural  abrasives ;  mineral  fillers  and 
absorbents;  mineral  pigments;  problems  in  the  mining  and 
utilization  of  low-grade  clays;  raw  materials  for  the  pottery 
industry;  and  many  others.  The  subject  of  clay  and  clay 
products,  which  is  surpassed  in  annual  value  of  products  only 
by  coal  and  iron,  has  many  problems  which  need  atten- 
tion. In  the  highway  construction  and  structural  industries 
the  non-metallic  minerals  are  of  enormous  importance.  The 
field  is  so  large  and  so  little  has  been  done  that  a  great  oppor- 
tunity for  real  service  exists.  The  Bureau  hopes  to  be  able  to 
perform  its  due  part  in  the  development  of  this  relatively  un- 
explored field. 


PRESENT  PROBLEMS  OF  THE  MINING  INDUSTRY        257 

Constant  advances  are  being  made  in  mining  and  metallur- 
gical practice,  and  it  becomes  increasingly  necessary  to  make 
such  advances  due  to  the  fact  that  it  is  necessary  to  mine  and 
treat  ores  that  ten  years  ago  would  not  have  been  considered 
ore.  Consequently  one  of  the  principal  functions  of  the  Bureau 
is  to  inquire  into  proposed  metallurgical  processes  in  order  to 
determine  whether  or  not  they  might  be  commercially  feasible ; 
likewise  to  devise  such  processes.  Very  often  as  a  result  the 
Bureau  is  able  to  develop  a  process  which  in  the  laboratory 
seems  to  be  a  feasible  one,  but  for  the  testing  of  it  on  a  semi- 
commercial  or  commercial  scale  it  must  depend  on  the  co- 
operation of  the  commercial  companies.  In  this  respect  I  am 
glad  to  say  the  Bureau  has  received  in  almost  every  instance 
the  hearty  support  and  co-operation  of  the  industry.  This  is 
true,  not  only  of  its  work  along  metallurgical  lines,  but  espe- 
cially in  connection  with  its  fuel  investigations  and  its  work  on 
petroleum. 

Meeting  War  Requirements 

During  the  war  the  supply  of  many  of  our  raw  materials  in 
many  cases  were  reduced  to  the  minimum,  many  others  were 
taxed  to  the  utmost,  and  at  times  we  faced  a  serious  shortage. 
These  limitations  placed  upon  many  of  our  resources  were  due 
to  our  military  demands.  Therefore,  any  consideration  of  a 
plan  for  national  security  must  comprehend  the  nation's  self- 
sufficient  supply,  not  only  for  our  military  needs,  but  for  an 
economical  extension  of  our  domestic  resources  wherever  pos- 
sible to  meet  increasing  needs  for  our  army,  navy  and  the 
public.  The  welfare  of  a  nation  is  dependent  upon  its  resources 
and  the  industrial  development  and  general  prosperity  depend 
upon  an  adequate  supply  of  the  many  materials  that  make  for 
the  life  of  a  nation. 

In  mentioning  these  things  the  point  I  wish  to  clearly  em- 
phasize is  that  the  Bureau  is  fully  cognizant  of  the  necessity 
of  extensive,  careful  and  systematic  research  and  investiga- 
tional  work  in  order  to  meet  the  problems  which  are  now  con- 
fronting the  mineral  industry  and  which  must  continue  to  con- 
front it  if  we  are  to  develop  our  resources  to  the  best  advantage. 


258        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


PUTTING  OUR  RAILWAYS  ON  A  BUSINESS  BASIS 

Address  Delivered  Before  The  American  Mining  Congress,  November  17, 
1919,  by  ALBA  B.  JOHNSON,  Philadelphia,  Pa. 

(Mr.  Johnson  is  President  of  the  Railway  Business  Association.) 

What  legislation  is  to  be  passed  in  order  to  make  it  possible 
for  the  owners  to  operate  their  railroads  without  bankruptcy 
has  become  a  question  pressing  upon  the  public  attention  more 
strongly  than  any  other  at  this  time,  save  only  that  of  the 
League  of  Nations  and  the  Peace  Treaty.  We  have  had  two 
years  in  which  to  think  it  over ;  yet  when  the  time  is  approach- 
ing, not  a  matter  of  months,  but  a  matter  of  weeks,  when  this 
problem  must  be  solved,  we  find  ourselves  with  some  36  plans 
offered,  of  which  no  less  than  7  have  become  widely  known. 
The  voice  of  the  business  men  of  the  United  States  has  been 
a  discordant  medley.  Every  conceivable  plan  has  been  urged 
for  consideration.  The  Railway  Business  Association  has  pre- 
pared no  plan,  but  has  felt  that  there  are  certain  principles 
which  are  involved,  and  if  these  principles  are  adopted,  we  care 
not  what  plan  embodies  them. 

The  directors  of  the  Chamber  of  Commerce  of  the  United 
States  received  the  report  of  their  Railroad  Committee  on  the 
first  of  May  last.  The  polls  closed  on  the  referendum  July  24. 
The  voice  of  the  country  was  almost  unanimous  in  approving 
these  recommendations  which  favored  private  operation  of  rail- 
ways and  certain  other  principles ;  but  since  July  24,  although 
this  question  changes  its  aspect  daily,  the  Chamber  of  Com- 
merce has  been  constrained  to  restrict  its  discussion  to  the 
precise  recommendations  upon  which  the  constituent  bodies 
voted  in  July.  This  restriction  is  due  to  a  rule  of  the  Chamber 
which  the  Railway  Business  Association  voted  for  when  it  was 
adopted  and  which  we  approve  now.  We  would  deplore  any 
impairment  of  the  system  under  which,  after  deliberate  study 
by  a  competent  committee  upon  a  subject  of  first  national 
importance,  the  Chamber  submits  the  fundamentals  to  the 
business  organizations  of  the  country  for  a  dignified  and  im- 
pressive expression  of  deliberate  and  enlightened  opinion,  the 


PUTTING  OUR  RAILWAYS  ON  A  BUSINESS  BASIS         259 

Chamber  never  speaking  business  sentiment  without  having 
ascertained  it.  No  doubt  some  of  the  constituent  bodies  mis- 
understand this  process.  There  is  evidence  that  many  of  them 
expect  the  Chamber  officers  to  go  outside  the  scope  defined  in 
the  referendum,  believe  that  it  does  so,  and  fold  their  hands 
in  confidence  that  great  national  measures  will  be  carried  to 
enactment  with  constant  and  always  up-to-the-minute  par- 
ticipation by  organized  business  without  their  doing  anything 
after  voting. 

Conferences  Called 

That  the  Chamber  recognized  the  need  for  supplementary 
machinery  was  shown  when  it  authorized  the  calling  of  the 
National  Transportation  Conference,  conducted  under  auspices 
of  the  Chamber  but  in  no  way  authorized  to  speak  for  it.  All 
the  members  of  the  Railroad  Committee  were  appointed  mem- 
bers of  the  Conference  and  several  of  them  participated 
actively.  The  result  was  that  one  of  the  seven  leading  plans 
was  recommended — a  plan  containing  matter  in  several  aspects 
vitally  wider  than  the  referendum.  The  conferees  sat  as  indi- 
viduals. They  bore  no  commission  from  organizations.  They 
had  no  ways  or  means  of  rallying  the  constituents  of  the 
Chamber  to  their  plan. 

In  these  circumstances  Harry  H.  Merrick,  president  of  the 
Chicago  Association  of  Commerce  and  also  of  the  Mississippi 
Valley  Association,  arranged  for  a  conference  of  officers  of 
organizations  in  Atlantic  City  at  the  time  of  the  International 
Trade  Conference  in  October.  Among  those  who  accepted  the 
invitation  to  be  present  were  National  Chamber  officers — the 
chairman  of  the  Executive  Committee,  a  director,  the  chair- 
man of  the  Railroad  Committee  and  the  general  secretary. 
These  officers  were  asked  whether  they  saw  any  objection  to 
the  formation  of  a  committee,  representing  constituent  bodies, 
to  discuss  principles  not  inconsistent  with  the  Chamber  refer- 
endum and  others  not  dealt  with  by  it ;  and  if  so,  whether  the 
Chamber  would  prefer  or  not  to  act  as  recipient  of  replies  to  a 
circular  inviting  co-operation  from  associations.  As  to  the 
second  question,  attention  was  called  to  the  difficulty,  as  shown 
by  experience,  of  making  members  of  Congress  understand 
the  distinction  between  official  recommendations  of  the  Cham- 


260         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ber  and  those  of  groups  to  which  it  merely  lends  its  good 
offices ;  and  it  was  suggested  that  the  proposed  committee  keep 
itself  wholly  independent.  As  to  the  first  main  question,  a 
statement  was  made,  and  was  subsequently  used  by  the  Cham- 
ber in  answering  inquiries  by  constituent  bodies,  that  the 
proposed  independent  activity  of  a  group  of  associations  was 
deemed  entirely  proper. 

The  Co-operative  Committee 

The  Atlantic  City  conferees,  including  officers  of  four  na- 
tional and  seven  city  associations,  agreed  to  constitute  them- 
selves into  what  is  called  the  Co-operative  Committee  on 
Railway  Legislation.  The  chairman  is  Mr.  Merrick. 

What  will  the  Co-operative  Committee  urge  upon  Congress  ? 
This  is  for  the  Committee  to  say;  but  I  hope  they  will  put 
some  questions  to  all  those  who  are  engaged  in  agriculture, 
mining,  industry  or  commerce.  These  are  the  questions: 

(1)  Do  you  not  believe  that  apart  from  misdeeds  of  railway 
managers  and  financiers,  which  should  be  restrained,  and  apart 
from  their  assertions  of  poverty,  which  are  a  matter  of  busi- 
ness adjustment,  the  impairment  of  railway  credit  has  been  in 
large  part  due  to  the  policy  of  the  Federal  and  State  govern- 
ments in  the  regulation  of  rates? 

Investors  Cannot  Be  Misled 

In  support  of  the  assertion  that  the  railroads  were  them- 
selves responsible  for  the  impairment  of  their  credit,  it  has 
been  declared  that  railroad-wrecking  had  spread  its  odium  over 
properties  otherwise  sound,  and  that  the  managers  by  their 
calamity-howling  had  "beared"  their  own  credit;  so  that  if 
these  two  elements  were  eliminated,  no  change  in  Government 
regulation  of  rates  would  be  necessary.  But  investors  do  not 
invest  on  "front"  or  refrain  from  investing  on  second-hand 
odium ;  they  act  on  expert  advice,  which  is  based  on  knowledge 
with  regard  to  each  individual  property  as  to  its  income  and 
prospects  of  income,  and  as  to  the  integrity  and  stability  of  its 
management.  Practically  no  influence  is  exerted  upon  invest- 
ment in  a  strong  road  by  misdeeds  or  misfortunes  afflicting 
other  roads.  Each  road  stands  or  falls  on  its  own  condition. 


PUTTING  OUR  RAILWAYS  ON  A  BUSINESS  BASIS         261 

As  for  calamity-howling,  are  railway  managers  seriously 
supposed  to  think  that  statements  of  inadequate  income  laid 
before  rate  tribunals  can  escape  the  eye  of  those  who  advise 
investors?  In  any  event,  every  railroad  board  includes,  quite 
properly,  bankers  who  make  a  part  of  their  living  as  whole- 
salers of  securities.  Who  believes  that  they  would  consent, 
as  railroad  directors,  to  a  comparison  certain  to  curtail  their 
dealings  as  bankers,  if  the  income  situation  had  not  become 
desperate  beyond  remedy  within  the  reach  of  the  managers 
and  financiers?  Railroad  boards  contain  the  ablest,  most 
successful,  best  respected  and  most  fully  trusted  men  in  the 
country — merchants,  manufacturers,  professional  men.  To 
accuse  such  men  either  of  imbecility  or  villainy  of  this  sort  is 
to  indict  the  best  there  is  in  the  nation.  It  is  incredible.  It 
is  not  true.  Credit  can  only  be  restored  by  adapting  the  policy 
of  the  Government  to  the  course  of  events.  Such  a  change  in 
policy  is  long  overdue.  It  should  wait  no  longer. 

What  Is  Attitude  of  Congress? 

What  is  the  apparent  attitude  of  the  two  branches  of  Con- 
gress on  this  vital  point? 

The  House  Bill,  which  I  presume  has  been  or  is  being  passed 
today,  leaves  the  Interstate  Commerce  Commission  without 
obligatory  mandate  to  permit  such  rates  as  will  yield  revenue 
sufficient  to  attract  capital.  The  spirit  of  the  House  Com- 
mittee is,  we  fear,  indicated  by  the  annexation  to  their  report 
of  a  statement  by  Interstate  Commerce  Commissioner  Mc- 
Chord,  who  says:  "Whatever  decline  there  was  in  railway 
credit  previous  to  Federal  control  was  not  due  to  any  action 
of  the  Interstate  Commerce  Commission." 

The  Senate  Bill  attacks  the  credit  question  directly  and  in 
a  mandatory  manner,  requiring  that  such  rates  be  permitted 
as  will  yield  a  specified  rate  of  return  on  the  value  of  the 
property.  The  Senate  Committee  report,  moreover,  has  this: 
"Legislation  *  *  *  must  tender  to  the  future  investor  *  *  * 
reasonable  assurance  of  such  yearly  return  as  will  induce  him 
to  enter  the  field.  *  *  *  It  is  here  that  our  present  system 
of  regulation  has  failed." 

It  is  the  task  of  citizens  to  aid  the  Senate  Committee  in 


262         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

commanding  support  for  that  position  in  the  Senate  and  to 
persuade  the  House  to  concur. 

(2)  Since  the  Federal  authorities  must  sanction  adequate 
total  revenue  for  all  roads  from  all  sources,  do  you  not  believe 
that  any  businesslike  regulation  of  carriers  which  are  parties 
to  interstate  hauls  requires  that  all  rates  of  all  such  carriers 
shall  be  under  the  jurisdiction  of  Federal  authorities? 

Too  Much  Regulation 

Neither  the  railroads  any  better  than  the  insurance  com- 
panies or  any  line  of  public  business  can  be  successfully  regu- 
lated by  49  regulatory  bodies.  In  order  to  prevent  discrimina- 
tion and  undue  burden  on  interstate  commerce  through  State 
regulation,  every  carrier  which  hauls  any  interstate  cargo 
should  be  subject  to  the  regulation  of  all  its  rates  by  the 
Federal  authority. 

(3)  Do  you  not  believe  that  resumption  of  railway  develop- 
ment requires,  among  other  things,  that  Congress  supplement 
its  present  statutory  policy  of  restrictions  only  by  enacting 
that  rates  shall  be  such  as  to  yield  revenue  sufficient  for  neces- 
sary expenses  and  for  the  credit  basis  which  will  enable  the 
average  road  to  secure  improvements  and  extensions? 

This  applies  to  the  proposition  contained  in  Question  1.  That 
was  that  Congress  should  recognize  the  necessity  for  a  change 
in  Government  regulation  in  order  to  restore  railway  credit. 
Question  3  deals  with  one  of  the  essentials  in  carrying  out 
that  proposal.  The  law  as  it  stands  gives  the  jurisdiction  over 
each  individual  rate  as  to  its  justness  and  reasonableness. 
The  Commission  has  no  authority  to  sanction  whole  rate 
structures  primarily  to  yield  a  certain  amount  of  total  revenue. 
The  Senate  Committee  Bill  explicitly  bestows  such  power.  The 
House  Bill  does  not.  Such  power  should  be  a  feature  of  the 
act. 

(4)  Do  you  not  believe  that  an  indispensable  requirement 
in  putting  the  railways  on  a  business  basis  is  that  the  regu- 
latory authorities  at  workable  intervals  ascertain  for  a  forth- 
coming period  the  transportation  needs  of  the  country,  and 
report  to  Congress  or  to  the  public  their  findings  as  to  such 
needs  and  their  estimate  of  the  necessary  revenue  ? 


PUTTING  OUR  RAILWAYS  ON  A  BUSINESS  BASIS         263 

The  House  Committee  Bill  as  introduced  provided  that  the 
Commission  should  keep  itself  informed  of  transportation 
needs  and  operating  revenues  necessary  to  adequacy  and  effi- 
ciency of  facilities  and  service.  Newspaper  dispatches  not  yet 
verified  in  detail  indicate  that  possibly  this  passage  was  elim- 
inated on  the  floor.  Even  if  left  in,  it  does  not  require  the 
Commission  to  keep  the  public  informed.  The  Senate  Com- 
mittee Bill  provides  for  a  similar  inquiry  by  a  Transportation 
Board,  which  is  to  certify  its  findings  to  the  Commission,  such 
certificate  to  be  prima  facie  evidence.  Whether  there  is  to 
be  a  new  board  or  not  the  results  of  such  observation  and 
study  should  be  a  public  report  of  findings,  and  such  report 
should  cover,  not  past  periods,  like  the  statistics  of  large-scale 
rate-advance  cases  hitherto,  but  the  future.  We  do  not  care 
anything  about  the  water  that  has  passed  over  the  dam ;  you 
have  to  be  prepared  for  the  flood  that  is  coming. 

(5)  Do  you  not  believe  that  in  estimating  the  net  income 
required  for  each  group  in  order  to  attract  capital  in  the 
amount   approved   as   necessary   the   regulatory   authorities 
should  have  the  power  and  the  duty  to  ascertain  and  announce 
the  rate  of  return  which  under  money  market  conditions  at 
a  given  time  it  is  necessary  to  allow? 

Vital  Technicality 

"And  announce."  Nothing  is  more  vital.  If  the  regulatory 
authority  is  required  to  announce  its  estimates  as  a  whole, 
and  specify  what  rate  of  return  this  is  based  upon,  the  public 
will  be  able  at  all  times  to  judge  what  if  any  adjustments  are 
required  to  bring  the  estimates  into  line  with  the  facts;  the 
public,  with  this  complete  understanding  of  the  situation,  will 
acquiesce  in  such  adjustments;  the  Commission,  having  set  a 
mark  to  attain,  will  itself  realize  with  some  exactness  what  is 
required  of  it  and  bend  every  energy  toward  performance. 

(6)  Are  you  not  willing  to  help  Congress  put  the  railways 
on  a  business  basis  without  regard  to  your  preferences  as  to 
methods,  by  informing  Senators  and  Representatives  what  you 
and  others  whose  view  you  have  ascertained  regard  as  the 
necessary  objects  of  railway  legislation? 


264         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

This  last  question  may  be  summarized  in  two  words — get 
busy.  Now  is  the  time.  These  next  30  days  or  less  may  be  the 
time  during  which  this  great  question  of  the  future  condition 
of  the  railways  of  the  United  States  is  to  be  established,  not 
for  next  year  or  for  the  next  10  years,  but  for  an  indefinite 
period  ahead — possibly  for  all  time. 


OUR  PRESSING  RAILWAY  PROBLEM  265 


OUR  PRESSING  RAILWAY  PROBLEM 

Address  by  SAMUEL  O.  DUNN,  Editor  "Railway  Age/'  Chicago^  111., 
Before  The  American  Mining  Congress,  November  17,  1919 

The  railroad  problem  has  so  many  phases,  and  so  many  plans 
for  its  solution  have  been  presented  that  it  is  difficult  to  decide 
just  what  plans  and  what  points  in  the  various  plans  to  dis- 
cuss in  the  brief  time  that  can  be  taken  at  a  meeting  of  this 
kind.  There  are,  however,  certain  questions  involved  which 
seem  to  me  to  overtop  all  the  others,  and  I  shall  try  to  touch 
upon  them. 

The  plans  for  solving  the  problem  which  have  been  proposed 
are  roughly  divisible  into  those  which  provide  for  Government 
ownership  and  those  which  provide  for  private  ownership. 
Formerly  practically  all  who  favored  Government  ownership 
also  advocated  Government  management.  At  the  present  time 
the  number  who  advocate  both  Government  ownership  and 
management  is  small.  Most  of  those  who  now  advocate  Gov- 
ernment ownership  are  championing  the  Plumb  Plan,  which  in 
effect  provides  for  turning  the  railroads  over  to  the  manage- 
ment of  the  employees. 

When  Government  operation  was  adopted  there  were  many 
persons  in  the  country  who  favored  Government  ownership 
and  management.  After  almost  two  years  of  Government 
operation  the  only  large  class  that  now  favors  Government 
ownership  is  the  railroad  employees,  and  there  is  no  large  class 
which  is  in  favor  of  Government  management.  I  shall  not 
attempt  to  review  the  reasons  why  there  has  deevloped  such 
an  overwhelming  public  sentiment  against  Government  man- 
agement. That  it  exists  is  unquestionable. 

The  Plumb  Plan 

The  plan  which  recently  has  received  the  most  attention  and 
discussion  is  the  Plumb  Plan.  Since  that  plan  lacks  the  united 
support  even  of  organized  labor,  and  since  it  has  met  the 
opposition  of  almost  all  other  classes  of  people,  it  stands  no 
chance  of  adoption  in  the  near  future.  It  appears  certain 


266         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

that  the  railroads  will  be  returned  to  private  operation  at  the 
end  of  this  year. 

Assuming,  as  we  all  must,  that  the  railways  are  going  to  be 
returned  to  private  management,  it  would  appear  that,  regard- 
less of  our  individual  views  on  the  question  of  Government 
ownership  versus  private  ownership,  we  should  want  to  see 
the  conditions  made  favorable  to  the  success  of  private  man- 
agement. This  is  a  democratic  country,  and  if  the  public  ever 
wills,  as  it  may,  that  Government  ownership  shall  be  made 
the  policy  of  the  nation,  I  shall  want  to  see  the  system  of 
management  made  as  successful  as  it  is  possible  to  make  it. 
On  the  other  hand,  since  the  public  has  willed  that  for  some 
years  to  come,  at  least,  the  system  of  private  management 
shall  prevail,  every  patriotic  citizen  should  desire  to  see  legis- 
lation enacted  which  will  give  opportunity  to  make  private 
management  as  successful  as  it  can  be  made. 

Increased  Facilities  Needed 

At  the  present  time  the  most  imperative  need  of  the  coun- 
try from  a  transportation  standpoint  is  an  immediate  revival 
of  the  expansion  of  railroad  facilities  on  a  very  large  scale* 
This  need  does  not  exist  because  the  railways  are  going  to  be 
returned  to  private  management.  It  would  exist  just  the  same 
if  Government  ownership  and  management  or  the  Plumb  Plan 
ware  to  be  adopted. 

The  fact  that  there  is  need  for  an  early  and  very  large 
expansion  of  railroad  facilities  has  been  emphasized  repeatedly 
by  the  Director-General  of  Railroads,  Mr.  Walker  D.  Hines,  who 
is  strategically  in  the  best  position  to  know  what  the  trans- 
portation situation  is.  In  a  recent  address  he  said : 

"In  the  year  or  two  preceding  Federal  control  of  the  rail- 
roads the  normal  additions  to  cars  and  other  transportation 
facilities  were  not  made  because  prices  were  very  high,  labor 
was  scarce,  and  financing  on  the  part  of  the  railroad  com- 
panies was  unusually  difficult.  *  *  *  During  the  first  year 
of  Federal  control  there  was  a  severe  limitation  as  to  the 
amount  of  material  that  could  be  taken  from  other  war  pur- 
poses to  use  for  providing  additional  railroad  facilities.  *  *  * 
When  the  year  1919  began  we  were  then  confronted  with  a 
new  difficulty  in  the  way  of  adding  to  the  facilities,  and  that 


OUR  PRESSING  RAILWAY  PROBLEM  267 

was  that  Federal  control  naturally  was  approaching  its  end 
from  the  time  the  armistice  was  signed.  More  than  that,  the 
failure  of  the  appropriation  on  the  4th  of  March  last,  which 
had  been  sought  by  the  Railroad  Administration  to  enable  it 
to  meet  its  obligations  already  incurred,  postponed  the  con- 
struction of  even  the  hundred  thousand  cars  that  had  been 
ordered,  because  they  could  not  be  paid  for,  and  the  equip- 
ment companies  naturally  had  to  slow  down  on  their  pro- 
duction. The  railroad  companies  were  unwilling  to  furnish 
money  for  new  equipment  because  of  uncertainty  as  to  their 
own  future,  so  the  result  has  been  that  the  Railroad  Admin- 
istration during  the  year  1919  has  not  been  in  position  to 
provide  any  additional  facilities  except  those  which  were 
needed,  as  an  emergency  measure,  unless  the  railroad  com- 
panies were  willing  to  furnish  the  money,  and  the  result  is  that 
at  the  present  time  the  Railroad  Administration  has  been 
unable  to  order  or  obtain  authority  to  order  any  cars  in  addi- 
tion to  the  hundred  thousand  that  were  ordered  last  year. 

Matter  of  Grave  Concern 

"So  that  that  inadequacy  of  facilities,  which  were  inade- 
quate before  Federal  control  began,  and  which  have  become 
increasingly  inadequate  since  that  time,  principally  accounts 
for  the  fact  that  the  facilities  are  not  sufficient  to  handle  all 
of  the  enormous  business  which  is  offering  to  the  railroads 
of  the  country.  *  *  *  We  are  in  a  waiting  and  uncertain 
situation  with  reference  to  the  provision  of  transportation 
facilities,  and  it  is  a  matter  of  very  grave  concern  to  the 
country.  In  my  judgment,  if  the  legislation  cannot  take  defi- 
nite shape  during  the  month  of  December,  so  that  the  railroads 
will  know  where  they  stand  and  can  begin  making  their  plans 
to  get  the  additional  facilities  they  will  undoubtedly  need  to 
handle  the  business  of  next  fall,  the  country  will  be  most 
disastrously  handicapped  next  fall  in  having  its  business 
moved." 

Some  Startling  Facts 

If  Mr.  Hines  had  chosen  to  use  the  available  statistics  bear- 
ing upon  the  subject  of  the  inadequacy  of  railroad  facilities, 


268         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

he  could  have  presented  the  existing  situation  in  a  manner 
which  would  have  been  positively  startling.  There  are  several 
different  ways  in  which  you  can  estimate  the  amount  of  new 
investment  which  must  be  made  to  increase  the  facilities  of  the 
railways  enough  to  bring  them  abreast  of  the  demands  of  the 
country's  commerce.  Probably  the  best  way  to  estimate  it  is 
on  the  basis  of  the  increases  which  have  occurred  in  the 
investment  in  the  properties  and  in  the  amount  of  traffic 
handled.  Mr.  Hines  remarked  that  in  the  year  or  two  before 
this  country  entered  the  war  the  railway  companies  had  been 
unable  materially  to  increase  their  facilities  because  of  the 
difficulty  of  raising  new  capital.  His  remark  takes  us  back 
practically  to  the  year  1915.  Now,  in  the  10  years  from  June 
30,  1906,  to  June  30,  1915,  the  increase  in  the  freight  business 
was  61  per  cent,  and  the  increase  in  the  passenger  business 
45  per  cent.  Meantime,  the  investment  made  in  new  facilities 
was  $5,300,000,000,  or  44  per  cent.  The  increase  in  freight 
business  since  the  year  ending  June  30,  1915,  has  been  57  per 
cent.,  and  the  increase  in  passenger  business  32  per  cent.,  each 
being  almost  as  great  as  it  was  in  the  preceding  10  years.  If 
the  new  investment  had  been  as  great  in  proportion  to  the 
increase  of  traffic  during  the  last  4%  years  as  it  was  during 
the  preceding  10  years,  it  would  have  been  about  $5,000,- 
000,000.  As  a  matter  of  fact,  it  has  been  less  than  $1,900,- 
000,000.  Furthermore,  because  of  advances  in  wages  and  in 
prices  of  materials,  a  dollar  would  not  buy  during  the  last  4% 
years  more  than  two-thirds,  and  perhaps  not  more  than  one- 
half  as  much  as  it  would  buy  on  the  average  during  the 
preceding  10  years. 

Therefore,  equated  on  the  1905-1915  basis  of  the  value  of 
money  the  investment  during  the  last  4%  years  has  been  only 
about  $1,300,000,000.  Assuming  that  investment  should  have 
been  made  during  this  4%  years  as  fast  in  proportion  to  the 
increase  of  traffic  as  it  was  during  the  preceding  10  years, 
the  investment  in  the  railways  has  fallen  behind  approximately 
$3,700,000,000  during  this  time.  But  that  is  stating  the  defi- 
ciency in  the  pre-war  value  of  money.  In  the  year  1919  two 
dollars  will  not  buy  a  railroad  any  more  labor,  equipment  and 
materials  than  a  dollar  would  on  the  average  in  the  years 
1905-1915.  The  average  wage  of  an  employee  is  now  125  per 


OUR  PRESSING  RAILWAY  PROBLEM  269 

cent,  higher  than  it  was  then.  Now,  the  deficiency  of  invest- 
ment must  be  made  up  in  dollars  of  the  present  value.  On  that 
basis  it  would  take  over  $7,000,000,000  to  make  up  the  defi- 
ciency in  railroad  investment  which  has  been  allowed  to  accrue 
since  1915. 


Poor  Service  Easily  Explained 

This  deficiency  in  investment  is  strongly  reflected  in  the 
remarkably  small  increase  in  facilities  which  has  been  made. 
During  the  10  years  ending  with  1915  the  increase  in  the 
freight  traffic  of  the  country  was  61  per  cent,  and  the  increase 
in  the  number  of  freight  cars  in  service  was  36  per  cent.  Dur- 
ing the  last  41/2  years  the  increase  in  the  freight  traffic  of  the 
country  has  been  57  per  cent,  and  the  increase  in  the  number 
of  freight  cars  in  service  has  been  only  5  per  cent. 

Between  1905  and  1915  the  increase  in  passenger  traffic  in 
this  country  was  45  per  cent,  and  the  increase  in  the  number 
of  passenger  cars  in  service  was  36  per  cent.  Since  1915  the 
increase  in  passenger  business  has  been  32  per  cent.,  and  there 
has  been  practically  no  increase  in  the  number  of  passenger 
cars.  The  increase  in  the  number  of  locomotives  in  the  country 
in  the  10  years  from  1905  to  1915  was  30  per  cent.  In  spite 
of  the  enormous  increase  of  traffic  since  1915  there  has  been 
practically  no  increase  in  the  number  of  locomotives.  The 
increase  in  the  railroad  mileage  of  the  country  between  1905 
and  1915  was  more  than  40,000  miles,  or  over  4,000  miles  a 
year.  There  has  been  no  increase  in  mileage  at  all  in  the  last 
four  years,  the  mileage  torn  up  or  abandoned  being  equal  to 
that  built. 

There  has  been  a  great  increase  in  the  efficiency  with  which 
railway  facilities  have  been  used  in  recent  years — most  of  this 
increase  having  taken  place  under  private  management  during- 
1916  and  1917 — and,  therefore,  it  undoubtedly  would  be  an 
exaggeration  to  assume  that  there  must  be  an  investment  of 
$7,000,000,000  to  make  good  the  deficiency  which  has  accrued 
since  1915.  But  allow  all  that  we  dare  for  that  increase  of 
efficiency,  and  £ut  the  estimated  deficiency  in  half,  and  you  will 
still  have  a  deficiency  to  make  good  of  at  least  $3,500,000,000. 


270         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Railroads  Must  Raise  Six  Billions 

Besides  making  up  this  deficiency  of  investment  and  facili- 
ties, the  railways  must  provide  in  future  still  other  additional 
facilities  to  care  for  the  future  increase  of  business.  As  I  have 
shown,  the  average  investment  per  year  in  10  years  ending 
June  30,  1915,  was  $530,000,000.  With  present  wages  and 
prices  it  would  cost  at  least  $1,000,000,000  to  provide  as  much 
additional  facilities  as  were  formerly  provided  for  a  half  billion 
dollars.  With  a  deficiency  of  at  least  $3,500,000,000  to  make 
good  and  an  investment  of  at  least  $1,000,000,000  a  year  re- 
quired to  provide  for  the  growth  of  business,  it  follows  that 
the  railways,  if  they  are  to  provide  for  the  needs  of  American 
commerce,  must  raise  and  invest  at  least  $6,000,000,000  or 
$6,500,000,000  of  new  capital  within  the  next  three  years. 
This  is  a  conservative  estimate.  They  ought  to  acquire  within 
that  time,  for  example,  about  800,000  freight  cars,  20,000  loco- 
motives and  10,000  passenger  cars,  and  to  provide  other  facili- 
ties— new  lines,  tracks,  sidings,  yards,  terminals,  roundhouses, 
shops,  and  so  on,  in  proportion. 

It  is  needless  to  tell  any  man  who  ships  goods  or  who  travels 
upon  our  railroads  that  the  vast  deficiency  in  railroad  invest- 
ment which  has  accrued  is  reflected  in  the  service  now  being 
rendered.  It  has  become  impossible  for  the  railroads  to  handle 
all  the  traffic  which  is  offered  to  them  at  any  time  when  the 
country  is  producing  to  anywhere  near  the  limit  of  its  capacity. 
In  the  fall  of  1917  the  Railroads'  War  Board  warned  the  Gov- 
ernment that  even  then  it  had  become  impossible  to  handle 
all  the  available  freight,  and  that  if  the  essential  war  traffic 
was  to  be  handled,  the  so-called  "non-essentials"  would  have  to 
be  excluded.  In  1918,  under  Government  operation,  in  spite  of 
the  fact  that  the  Government  had  almost  unlimited  power 
and  the  advantage  of  $577,000,000  worth  of  facilities  in  addi- 
tion to  those  the  railway  companies  had  provided  in  1917,  it 
was  able  to  increase  the  freight  handled  only  2  per  cent.,  and 
it  found  it  necessary  constantly  to  embargo  many  kinds  of 
commodities. 

Peace  Brought  No  Relief 

Last  spring,  when  the  railways  lost  a  large  amount  of  war 
business,  there  was  a  temporary  surplusage  of  cars,  but  as 


OUR  PRESSING  RAILWAY  PROBLEM  271 

soon  as  the  country  began  to  produce  again  on  a  peace  basis 
this  surplusage  disappeared,  and  during  recent  months  it  has 
again  been  impossible  to  handle  all  the  available  freight.  I 
do  not  say  merely  that  it  has  been  impossible  to  handle  all 
the  freight  satisfactorily.  I  say  it  has  been  impossible  to 
handle  much  of  it  at  all.  It  has  been  impossible  to  furnish 
sufficient  cars  to  the  coal  mines  and  that  has  cut  down  the 
production  of  coal.  It  has  been  impossible  to  furnish  enough 
cars  for  the  movement  of  lumber  and  that  has  curtailed  the 
production  of  lumber.  It  has  been  impossible  to  furnish  enough 
cars  for  the  movement  of  wheat.  The  various  state,  munic- 
ipal and  other  governments  have  appropriated  $633,000,000 
to  be  spent  during  the  next  year  in  building  new  roads.  Those 
roads  can't  be  built,  simply  because  the  railways  can't  handle 
the  materials. 

Railroads  Couldn't  Handle  Increased  Production 

People  talk  about  the  need  for  an  increase  in  production. 
There  is  great  need  of  an  increase  of  production,  but  there 
cannot  be  any  further  substantial  increase  of  production  in 
this  country  until  there  has  been  a  substantial  increase  in  the 
facilities  of  transportation,  because  there  can  be  no  substan- 
tially increased  production  without  increased  transportation. 
Unless  there  is  invested  in  new  railroad  facilities  within  the 
next  few  years  at  least  $6,000,000,000  of  new  capital,  it  is  a 
perfectly  safe  prediction  that  three  years  from  now  the  rail- 
roads will  still  be  unable  to  move  all  the  commodities  that  the 
country  can  produce;  and,  regardless  of  the  amount  of  new 
investment  made  in  railroads  meantime,  there  will  not  be  a 
year  in  the  next  three,  unless  there  is  a  severe  depression  in 
general  business,  when  the  railroads,  whether  under  Govern- 
ment or  private  management,  will  be  able  to  move  all  the 
traffic  which  the  industries  of  the  country  can  offer. 

Private  Ownership  Won't  Work  Miracle 

Many  people  seem  to  think  that  as  soon  as  the  railways  are 
returned  to  private  operation  there  will  be  a  restoration  of  the 
good  freight  and  passenger  service  which  formerly  was  ren- 
dered. The  good  service  formerly  rendered  will  not  be  restored 


272         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

immediately  or  very  soon  after  a  return  to  private  operation, 
because  the  cars,  locomotives,  tracks  and  yards  required  to 
render  it  do  not  and  will  not  exist.  They  can  be  provided  only 
by  a  vast  expenditure  of  new  capital,  and  unless  there  is  a 
vast  expenditure  of  new  capital  they  never  will  exist. 

It  is  now  generally  conceded  that  before  Government  opera- 
tion was  adopted  the  credit  of  the  railroad  companies  generally 
had  been  impaired,  and  that  it  was  in  consequence  of  this  that 
the  transportation  facilities  of  the  country  had  become  inade- 
quate. The  critics  of  private  management  attribute  this  im- 
pairment of  credit  largely  or  wholly  to  financial  mismanage- 
ment and  to  the  constant  complaints  of  the  spokesmen  of  the 
companies  that  their  earning  capacity  was  being  destroyed  by 
regulation.  On  the  other  hand,  the  leaders  of  the  railroad 
industry  claim  that  the  impairment  of  credit  and  the  general 
decline  in  the  development  of  railroad  facilities  were  chiefly 
due  to  unwise  and  unjust  regulations. 

The  claims  of  both  sides  are  based  upon  facts.  In  the  case 
of  some  railroad  companies  there  had  been  gross  watering  of 
stock  and  other  financial  abuses,  and  in  order  to  prevent  these 
things  in  future  it  is  now  generally  agreed  that  some  Federal 
body  should  be  given  power  to  supervise  the  issuance  of  all 
railroad  securities.  But,  having  provided  means  of  preventing 
abuses  in  financial  management  in  future,  the  public  must  also 
in  its  own  interest  in  some  way  assure  to  those  who  make 
investments  in  railways  that  they  will  be  given  opportunities 
to  derive  a  reasonable  return  from  their  investments. 

Congress  Must  Encourage  Investment 

In  my  opinion,  the  principal  test  which  should  be  applied  to 
any  measure  to  solve  the  railroad  problem  which  is  introduced 
in  Congress  is  the  question,  "Would  this  proposed  legislation 
if  passed  enable  the  railroad  companies  to  raise  and  invest 
in  their  properties  at  least  $6,000,000,000  of  new  capital  within 
the  next  three  years?"  If  the  answer  "Yes"  can  be  made  to 
that  question,  then  the  proposed  legislation  may  be  sufficient ; 
but  if  the  answer  "No"  must  be  made,  then  the  proposed  legis- 
lation certainly  is  not  sufficient,  no  matter  how  good  it  may  be 
in  other  respects.  The  question  of  what  net  return  the  rail- 
way companies  are  to  be  allowed  to  earn  is,  from  the  stand- 


OUR  PRESSING  RAILWAY  PROBLEM  273 

point  of  the  public  as  well  as  that  of  the  companies,  the  very 
essence  of  the  railroad  problem.  Without  that  question  clearly 
and  correctly  answered  by  new  legislation,  the  return  of  the 
railways  to  private  operation  will  not  be  followed  by  a  revival 
of  the  expansion  of  railroad  facilities;  and  without  a  revival 
of  railroad  expansion  the  country's  industrial  and  commercial 
growth  will  be  practically  stopped. 

The  plans  which  have  been  proposed  for  assuring  adequate 
returns  to  investors  in  railway  securities  may  be  roughly 
divided  into  two  classes.  On  the  one  hand,  the  Association  of 
the  Railway  Executives  has  proposed  that  the  law  shall  require 
rates  to  be  made  high  enough  to  encourage  adequate  railway 
expansion  and  shall  create  a  Federal  Transportation  Board, 
one  of  whose  principal  functions  shall  be  to  certify  to  the 
Interstate  Commerce  Commission  the  amount  which  the  rail- 
roads should  be  allowed  to  earn  in  the  public  interest.  The 
Railway  Executives  have  opposed  the  requirement  by  law  that 
any  specified  percentage  of  return  must  be  allowed  to  be 
earned,  and  have  insisted  that  each  railroad  should  be  allowed 
to  keep  all  the  return  it  could  earn  on  rates  found  to  be  fair  and 
reasonable  for  the  railroads  as  a  whole.  They  are  unalterably 
opposed  to  leaving  the  entire  matter  to  be  determined  by  the 
Interstate  Commerce  Commission  in  its  discretion,  because 
they  believe  from  past  experience  the  Commission  never  will 
let  the  railways  earn  adequate  returns.  Some  business  men 
have  advocated  plans  under  which  Congress  would  require  that 
each  large  group  of  railroads  should  be  allowed  to  earn  an 
average  return  of,  say,  6  per  cent,  upon  its  property  invest- 
ment or  valuation,  and  that  any  individual  railway  which 
earned  more  than  the  specified  average  return  should  divide 
its  surplus  earnings  with  the  Government  or  with  the  Govern- 
ment and  railroad  employees.  The  framers  of  the  Cummins 
bill  have  provided  that  each  large  group  of  railroads  shall  be 
given  rates  which  will  enable  the  railroads  of  the  group  to 
earn  an  average  of  at  least  5*/2  per  cent,  upon  their  combined 
valuation  which  may  be  used  in  paying  interest  and  dividends, 
and  an  additional  %  per  cent,  which  may  be  invested  in  unpro- 
ductive improvements.  If  an  individual  company  earns  more 
than  6  per  cent.,  it  must  put  part  of  the  surplus  into  a  reserve 
fund  of  its  own,  but  most  of  the  surplus  must  be  paid  into  a 


274         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

general  railroad  contingent  fund  to  be  used  in  making  loans 
to  railway  companies  that  cannot  raise  sufficient  capital  on 
their  own  credit  or  in  buying  equipment  to  be  leased  to  them. 
When  a  company  has  accumulated  a  reserve  fund  of  5  per  cent, 
of  its  valuation  and  is  earning  over  6  per  cent.,  it  must  pay 
two-thirds  of  its  surplus  earnings  into  the  general  railroad 
contingent  fund  and  may  use  the  other  one-third  as  it  pleases. 

Fair  Return  on  Investment 

I  have  always  believed,  and  as  a  matter  of  principle  I  still 
believe,  that  the  rates  of  the  railways  in  each  large  territory 
of  the  country  should  be  so  fixed  that  all  the  railroads  in  that 
territory  would  be  able  to  earn  a  reasonable  average  return 
on  their  combined  property  investment  or  combined  valuation ; 
and  that  if,  when  rates  were  so  fixed,  an  individual  railway 
was  able  to  earn  8,  10  or  even  20  per  cent.,  it  should  be  allowed 
to  retain  all  of  its  earnings  as  a  reward  for,  and  an  incentive  to, 
efficient  management.  It  is  difficult  to  see  how  rates  can  fairly 
be  held  to  be  excessive  if  they  merely  yield  to  all  the  railways 
in  a  territory  a  fair  return  upon  the  fair  value  of  their  com- 
bined property  investment  or  valuation;  and  if  rates  are 
reasonable,  it  is  difficult  to  see  why,  as  a  matter  of  justice  or 
expediency,  any  part  of  the  net  revenue  derived  by  an  indi- 
vidual road  from  such  rates  should  be  taken  from  it. 

But  we  should  look  the  facts  squarely  in  the  face.  The  facts 
are  that  in  every  important  rate  case  which  has  been  heard 
by  the  Interstate  Commerce  Commission  it  has  been  shown, 
first,  that,  as  a  whole,  the  group  of  railroads  involved  was  not 
earning  a  fair  return ;  and,  second,  that  some  individual  roads 
in  the  group  were  earning  much  more  than  the  average  earned 
by  all.  The  large  net  earnings  made  by  these  prosperous  indi- 
vidual roads  have  been  used  as  an  argument  against  permitting 
advances  in  the  rates  of  the  railways  of  the  entire  group,  upon 
the  ground  that  if  the  rates  of  all  the  railways  were  advanced 
the  so-called  "rich"  roads  would  be  enabled  to  earn  much  more 
than  it  was  necessary  for  them  to  earn  in  the  public  interest. 
This  argument  appears  to  have  been  effective.  In  one  case 
after  another  we  have  seen  advances  in  rates  denied  which 
developments  showed  were  needed  by  the  entire  groups  o£ 
roads  affected. 


OUR  PRESSING  RAILWAY  PROBLEM  275 

Favors  Cummins  Bill 

If,  in  order  to  get  rates  made  high  enough  for  the  railroads 
as  a  whole,  it  is  necessary  to  provide  that  the  "rich"  roads 
shall  be  required,  in  the  form  of  taxes  or  otherwise,  to  give 
up  part  of  their  surplus  earnings,  probably  it  is  in  the  interest 
of  the  railroads  as  a  whole  and  of  the  country  as  a  whole  that 
a  compromise  on  some  such  basis  be  made.  I  do  not  believe, 
however,  that  the  Cummins  bill  would  enable  the  railways, 
and  especially  the  more  prosperous  railways,  to  earn  and  keep 
large  enough  earnings  to  secure  the  maximum  efficiency  in 
operation  or  the  investment  of  as  much  new  capital  as  is 
needed,  for  the  bonds  of  the  best  railroad  companies  are  now 
selling  on  a  5%  per  cent,  basis  and  their  stock  on  a  7  per  cent, 
basis.  I  do  believe  that  the  passage  of  the  provisions  of  the 
Cummins  bill  regarding-  the  return  the  railways  shall  be 
allowed  to  earn  would  effect  a  substantial  improvement  in  our 
policy  of  regulation,  because  it  specifically  requires  the  regu- 
lating body  in  fixing  rates  to  give  weight  to  the  necessity  for 
the  expansion  of  railroad  facilities — a  thing  no  Federal  regu- 
lation has  heretofore  required.  All  experience  shows,  how- 
ever, that  the  spirit  in  which  laws  are  administered  is  quite 
as  important  as  their  actual  provisions — the  Esch  bill  would 
leave  the  determination  of  the  net  earnings  the  railroads 
should  be  allowed  to  make  entirely  in  the  hands  of  the  Inter- 
state Commerce  Commission.  It  is  greatly  to  be  feared,  in 
view  of  the  past  policy  and  present  personnel  of  that  body,  that 
the  Commission  would  in  future,  as  it  has  in  the  past,  refuse 
to  make  the  rates  demanded  by  the  welfare  of  both  the  rail- 
ways and  the  public.  The  provision  of  the  Cummins  bill  for 
the  creation  of  a  Transportation  Board  to  investigate  the 
transportation  needs  of  the  country  and  certify  its  findings  to 
the  Commission  is  an  eminently  wise  one. 

There  are  many  other  features  of  the  railroad  problem  which 
I  would  like  to  discuss,  but  time  will  not  permit. 

I  am  heartily  in  favor  of  legislation  authorizing  and  encour- 
aging consolidations  of  strong  and  weak  roads,  although  I 
doubt  the  practicability  or  expediency  of  making  consolidations 
compulsory. 


276         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Federal  Rate  Control 

The  Federal  Government's  regulation  of  rates  must  be  made 
supreme  and  controlling,  since  otherwise  the  State  authorities 
are  likely  to  defeat  all  efforts  to  give  the  railways  an  adequate 
return. 

One  of  the  most  difficult  problems  with  which  the  lawmakers 
are  confronted  is  that  of  providing  means  for  settling  labor 
controversies  on  railroads  without  strikes.  Until  a  few  years 
ago  the  possibility  of  a  strike  which  would  tie  up  all  the  rail- 
roads of  the  United  States  seemed  remote.  But  the  danger 
in  the  situation  is  now  apparent.  The  leaders  of  the  organized 
railway  employees  in  Great  Britain  are  certainly  no  more 
radical  than  the  leaders  of  the  organized  railway  employees 
of  the  United  States,  and  yet  we  have  recently  seen  Great 
Britain  in  the  throes  of  a  general  railroad  strike. 

It  would  seem  that  under  any  system  of  ownership  and  man- 
agement the  fair,  public-spirited  and  beneficent  way  to  settle 
railway  labor  controversies  would  be  by  mediation  and  arbitra- 
tion. The  public's  interest  is  the  largest,  and,  therefore,  it 
should  have  a  voice  in  any  settlement.  The  people  of  the 
country  are  growing  tired  of  the  constant  menace  of  a  great 
railroad  strike,  and  there  is  growing  up — among  the  farmers 
of  the  country  especially,  and  they,  after  all,  are  politically  the 
dominant  class  in  this  country  when  they  choose  to  assert 
themselves — a  strong  sentiment  against  these  constant  efforts 
of  labor  organizations,  and  especially  railway  labor  organiza- 
tions, to  dictate  terms  to  the  country  by  strikes  and  the  threat 
of  strikes. 

Prevention  of  Strikes 

I  have  never  been  an  advocate  of  compulsory  arbitration. 
I  do  believe,  however,  that  the  public,  which  would  suffer  most 
from  a  railroad  strike,  has  a  right  to  provide,  and  should  in  its 
own  interest  provide  by  law,  that  no  lockout  or  strike  shall  be 
declared  on  any  railroad  until  the  matters  in  dispute  have  been 
submitted  to  mediation  and  arbitration,  and  that  when  a  dis- 
pute goes  to  arbitration  the  public,  as  well  as  the  railway  com- 
panies and  the  employees,  must  be  represented  on  the  board. 
If,  after  the  arbitration  board  has  heard  all  the  evidence  and 
has  made  its  award  and  given  its  reasons  for  it,  the  railway 


OUR  PRESSING  RAILWAY  PROBLEM  277 

employees  want  to  strike,  perhaps  they  should  be  permitted  to, 
but  certainly  the  public  has  a  right  to  insist  that  they  shall 
submit  their  claims  to  the  arbitrament  of  reason  before  they 
shall  be  allowed  to  submit  them  to  the  arbitrament  of  force. 

President  Wilson  announced  in  May  that  the  railways  would 
be  returned  to  their  owners  at  the  end  of  the  present  year. 
It  was  generally  recognized  at  that  time  that  before  they  were 
returned  some  important  legislation  should  be  passed.  It  now 
appears  probable  that  if  they  are  returned  to  their  owners  on 
January  1  it  will  be  under  some  kind  of  temporary  legislation 
which  will  continue  the  present  Government  guarantees,  but 
which  will  not  definitely  settle  what  return  the  railways  are 
to  be  allowed  to  earn  after  the  guarantees  are  withdrawn.  I 
believe  it  would  be  better  to  return  the  railways  to  their 
owners  under  such  temporary  legislation  than  not  to  return 
them  at  all  at  the  end  of  the  year ;  but  every  day  that  perma- 
nent legislation  is  delayed  will  postpone  the  beginning  of  the 
expansion  of  railroad  facilities.  There  will  be  no  revival  of 
investment  in  railroad  securities  on  a  large  scale  unless  the 
Government  has  definitely  indicated  to  investors  what  kind  of 
a  "run  for  their  money"  it  intends  to  give  them  in  future. 

Public  Favors  Private  Ownership 

I  believe  that  the  people  of  the  United  States  have  decided 
in  favor  of  private  management  of  railroads,  and  that  in  due 
course  they  will  cause  to  be  enacted  such  legislation  as  may 
be  necessary  to  enable  private  management  to  succeed.  At  the 
same  time,  I  recognize  the  fact  that  the  railways  will  be  re- 
turned to  their  owners  under  conditions  which  for  some  time 
will  render  successful  private  operation  of  them  very  difficult, 
and  unless  the  right  kind  of  legislation  is  passed  the  results 
of  private  management  will  be  disappointing  to  the  public.  In 
that  case  we  will  be  in  great  danger  of  drifting  into  Govern- 
ment ownership,  in  spite  of  the  strong  sentiment  against  it 
which  now  exists. 


278         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE   EFFECT  OF  RAILWAY  RATES  ON  THE  MINING 

INDUSTRY 

Address  by  CLIFFORD  THORNE,  Chicago,  111.,  Before  The  American 
Mining  Congress,  St.  Louis,  Mo.,  November  20,  1919 

There  have  been  some  statements  made  this  evening  to 
which  I  am  going  to  make  a  brief  reply. 

I  wonder  if  you  and  I  fully  appreciate  the  importance  of 
this  transportation  problem.  As  you  are  sitting  here  this 
evening,  does  it  occur  to  you  that  a  tax  has  been  paid  to  our 
railroads  on  the  table  here,  on  the  floor,  on  the  material  in 
the  walls,  ceiling,  light  fixtures,  etc.,  that  a  tribute  has  been 
paid  upon  every  stitch  of  clothing  you  have  on,  and  you  will 
pay  a  railroad  tax  from  day  to  day  on  practically  everything 
you  buy  or  sell,  and  whenever  you  go  any  place? 

Next  to  agriculture,  this  is  the  greatest  industry  on  earth. 
I  have  been  seated  in  a  room  not  one-half  as  large  as  this  room 
in  which  a  case  was  being  tried  involving  the  sum  of  four 
hundred  millions  of  dollars  annually,  and  there  were  three 
men,  the  authorized  spokesmen  for  twenty  thousand  millions 
of  dollars'  worth  of  property.  Nine  men  called  upon  to  decide 
issues  in  a  controversy  involving  a  5  per  cent,  annual  return 
on  eight  billions  of  dollars,  or  more  than  the  total  estimated 
cost  of  the  Civil  War — a  case  involving  more  money  than  any 
other  controversy  that  has  ever  been  tried  before  a  human 
tribunal  since  the  dawn  of  civilization. 

I  want  to  relate  one  other  incident,  illustrating  the  impor- 
tance of  this  question  to  an  industry  or  community.  A  few 
years  ago  I  had  Hugh  L.  Cooper  on  the  stand.  Do  you  know 
who  Hugh  L.  Cooper  is  ?  He  has  built  more  water  power  than 
any  other  three  men  who  have  ever  lived  on  the  face  of  the 
earth.  We  were  trying  a  rate  case  over  at  Keokuk.  At  that 
time  Keokuk  and  the  other  north  Mississippi  River  crossings 
had  to  pay  from  four  to  nine  cents  a  hundred  pounds  higher 
than  St.  Louis  on  class  traffic  covering  some  8,000  items 
coming  from  the  East  or  going  to  the  East,  although  the 
relative  distance  to  Keokuk  and  Dubuque  was  practically  the 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      279 

same  as  to  St.  Louis,  from  four  to  nine  cents  per  hundred 
pounds  more  on  every  ton  brought  into  that  community  or 
shipped  out  to  and  from  the  East. 

During  the  course  of  the  examination  of  Mr.  Cooper  I  asked 
him  if  it  had  ever  been  estimated  what  the  cost  of  power  was 
in  the  manufacture  of  a  great  staple  commodity.  He  said: 
"Of  course  that  varies  from  year  to  year;  but  take  grain,  that 
is  a  fair  example.  Experts  have  estimated,  under  normal  con- 
ditions, the  cost  is  in  the  neighborhood  of  one  and  two-thirds 
cents  per  hundred  pounds  for  power." 

One  and  two-thirds  cents  per  hundred  pounds !  A  little  rate 
case  involved  more  money  than  the  total  cost  of  the  power. 
If  the  citizens  of  Keokuk  had  built  the  great  Keokuk  dam — 
the  greatest  individual  water  power  on  earth — out  of  their 
own  money  and  had  offered  power  free  of  cost  to  any  factory 
that  would  locate  in  their  community,  it  would  have  paid  that 
factory  to  have  gone  down  to  St.  Louis  or  Quincy,  rather  than 
locate  at  Keokuk,  even  though  they  had  the  power  given  to 
them  free  of  charge  at  Keokuk.  To  my  mind  that  is  a  very 
striking  illustration  of  the  relative  importance  of  freight  rates 
in  the  industrial  development  of  a  community. 

In  regard  to  railroad  revenues  many  unfortunate  statements 
have  been  circulated.  If  I  had  an  aggregation  of  twenty  bil- 
lions of  dollars  and  representatives  stationed  in  every  bank  of 
importance  in  the  country,  located  in  all  the  industrial  avenues 
of  the  nation,  I  believe  that  I  could  help  create  impressions 
that  would  help  me  win  rate  cases  and  get  laws  passed. 

I  want  to  give  you  one  or  two  illustrations.  It  has  been 
boldly  stated  that  the  Government  has  been  interfering  with 
railroad  operation  during  the  last  year  or  so.  Now  listen :  I 
have  in  my  home  a  list  of  all  the  district  freight  traffic  com- 
mittees from  New  York  to  San  Francisco,  and  Chicago  to  New 
Orleans,  that  were  appointed  to  hear  disputes  between  ship- 
pers and  railroads  and  decide  them,  subject  to  review  at  Wash- 
ington. Gentlemen,  up  to  within  the  past  few  weeks — without 
one  solitary  exception,  and  I  challenge  any  man  in  the  room  to 
question  it — without  one  exception  the  majority  of  every  one 
of  those  committees  were  railroad  men. 

Second,  I  have  this  statement  made  by  Director-General 
Hines,  a  former  director  of  the  Santa  Fe  Railroad  and  now 


280         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Director-General  of  Railroads.  At  Omaha,  June  10,  1919,  Mr. 
Walker  D.  Hines  stated: 

"I  want  you  to  remember  this  fact :  When  the  Government 
took  possession  of  the  railroads  not  a  single  railroad  was  put 
under  the  direction  of  a  man  who  was  not  a  railroad  man." 

On  Director  Hines'  staff  at  Washington,  with  only  one  excep- 
tion, every  man  on  his  staff  is  a  railroad  man. 

Railroad  Figures 

But  let  us  get  down  to  figures.  I  hold  in  my  hand  here  a 
sample  of  the  literature  that  has  been  circulated  throughout 
the  country;  the  book  is  entitled  "Railroad  Freight  Rates  in 
Relation  to  the  Industry  and  Commerce  of  the  United  States." 
It  is  a  classic  in  its  line,  elegantly  written,  many  facts  are 
accurately  stated  in  a  splendid  manner.  Toward  the  end  I 
find  18  conclusions  outlined ;  and  the  eighteenth  conclusion,  the 
climax  of  the  book,  is  to  the  effect  that  railroads  were  not 
making  half  as  much  in  proportion  to  their  capital  value  as 
those  people  engaged  in  agricultural  pursuits,  with  another 
comparison  in  regard  to  manufacturing  enterprises.  The  state- 
ment is  made  that  it  is  based  upon  statistics  compiled  by  dis- 
interested authorities  like  the  Census  Bureau. 

I  was  interested  in  the  figures  given  as  the  basis  for  it,  and 
on  a  preceding  page  (376)  I  found  the  figures.  On  that  page 
there  is  a  table  showing  statistics  how  the  farmers  are  making 
around  9  per  cent,  on  the  value  of  their  property,  and  the  rail- 
roads around  4%  or  5  per  cent.  I  will  impeach  that  table 
without  going  away  from  the  printed  page.  I  wish  you  would 
examine  this  little  book  some  time  at  your  leisure. 

Just  a  moment,  folks;  this  book  is  written  by  Mr.  McPher- 
son,  and  let  me  tell  you  who  Mr.  McPherson  is.  He  was  for- 
merly director  of  the  Bureau  of  Railway  Economics,  located  at 
Washington,  sustained  by  the  American  Railway  Association, 
representing  over  90  per  cent,  of  all  the  railroads  in  America. 
The  title  page  says  he  is  lecturer  on  transportation  at  Johns 
Hopkins  University — perhaps  he  was  at  that  time ;  it  was  not 
long  after  that  he  was  made  director  of  that  bureau. 

Let  us  look  at  those  figures.  I  find  in  this  statement  so 
many  people  are  said  to  be  engaged  in  the  railroad  industry 
and  so  much  money  is  paid  out  in  wages  and  salaries.  I  divide 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      281 

one  into  the  other,  and  I  find  that  the  average  wage  or  salary 
paid  the  man  engaged  in  the  railroad  industry  is  $607  a  year 
at  the  time  this  was  prepared. 

Humorous  Mathematics 

In  the  succeeding  set  of  figures  it  shows  10,900,000  people 
engaged  in  the  agriculture  industry ;  wages  paid  labor,  $397,- 
000,000,  approximately  $39  per  man  per  year.  Hasn't  the 
error  sunk  in  on  your  consciousness  yet  ?  The  farmer  does  not 
report  wages  paid  himself  or  his  son,  does  he?  He  assumes 
he  has  been  working  for  nothing ;  but  railroads  report  all  their 
wages  and  salaries  paid,  from  the  railroad  president  down  to 
the  section  hand. 

It  further  shows  that  if  you  multiply  $607,  what  railroad 
labor  got,  by  the  number  of  people  engaged  in  agricultural 
pursuits  the  cost  of  labor  would  be  so  great  that  it  would 
exceed  the  total  value  of  all  of  the  farm  products  combined 
by  nine  hundred  millions  of  dollars  in  round  numbers,  and  there 
would  be  not  one  cent  of  return  on  thirty  billion  dollars'  worth 
of  property.  [Applause.]  The  table  isn't  worth  the  paper  it 
is  printed  on. 

Literature  like  that  is  going  to  the  desks  of  your  newspaper 
editors  and  your  college  professors  and  your  statesmen  and 
politicians. 

A  few  years  ago  I  was  in  a  rate  case,  a  5  per  cent,  case ;  the 
railroads  were  trying  to  prove  a  justification  for  an  advance 
in  freight  rates,  and  the  table  I  had  showed  returns,  year  by 
year,  for  11  years.  It  showed  the  average  for  the  five-year 
period  ending  in  1912  was  less  than  for  the  five-year  period 
ending  in  1907,  and  it  showed  the  rate  of  return  on  the  capital 
outstanding  in  1913  was  less  than  for  the  five-year  period 
ending  in  1907. 

One  day  it  occurred  to  me,  Why  did  the  accountant  or 
statistician  stop  with  the  year  1912  when  he  made  his  five-year 
groups  ?  Why  didn't  he  carry  them  one  year  forward  and  take 
the  five-year  period  ending  in  1913  and  compare  that  to  the 
five-year  period  ending  in  1908?  I  asked  my  statistician  to 
recompile  the  statement,  not  go  off  that  sheet  but  simply  carry 
the  five-year  groups  one  year  forward.  He  did  so,  and  it 
showed  that  the  average  for  the  five  years  ending  in  1913  was 


282         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

greater  than  for  the  five  years  ending  in  1908,  and  it  showed 
that  1913  was  greater  than  either  five-year  average,  proving 
directly  the  opposite  of  what  the  table  indicated  at  first. 

Now,  I  say,  gentlemen,  that  when  we  hear  figures  stated  we 
want  to  be  careful  about  their  analysis  before  we  reach  con- 
clusions. There  is  an  old  saying  that  there  are  three  kinds  of 
liars:  First,  liars;  second,  damned  liars;  and,  third,  statis- 
ticians. [Laughter.] 

Two  Sides  to  Problem 

In  dealing  with  these  problems  we  want  to  remember  there 
are  two  sides.  In  regard  to  railroad  credit,  in  regard  to  rail- 
road earnings,  folks,  any  man  who  does  not  want  to  see  the 
railroads  have  splendid  credit  is  a  fool.  That  isn't  the  question 
at  all ;  the  question  is,  How  have  the  earnings  been  so  far  as 
the  credit  is  concerned? 

I  have  heard  the  statement  made  that  the  railroads  are  in 
a  deplorable  plight  today,  so  far  as  earnings  are  concerned. 
Yes,  and  I  have  heard  the  same  thing  about  a  good  many 
mining  companies,  too,  at  the  present  time.  I  have  heard  the 
same  thing  about  a  good  many  companies  in  other  lines  of 
business  at  the  present  time. 

Let  us  consider  the  situation  immediately  prior  to  the  war. 
I  am  not  going  to  take  long  in  discussing  this,  but  I  am  going 
to  make  one  statement  and  challenge  any  man  to  show  an 
error  in  the  assertion.  The  gross  earnings  and  the  net  earn- 
ings, above  all  operating  expenses,  taxes,  etc.,  of  the  American 
railroads  for  the  three-year  period  ending  June  30,  1919,  which 
was  adopted  as  the  test  period  for  the  Government  standard 
return,  the  net  return  of  American  railroads  was  greater  than 
for  any  other  three-year  consecutive  period  since  the  steam 
engine  was  invented.  The  rate  of  return  in  proportion  to  their 
property  investment  was  greater  than  any  other  period,  with 
one  exception. 

In  1907  the  return  on  outstanding  stock  was  greater  than 
for  any  other  three-year  period.  The  Interstate  Commerce 
Commission  in  1911  said  the  year  1907  was  not  typical,  and 
you  could  not  reach  conclusions  based  on  that  period,  because 
the  railroads  had  failed  to  keep  the  investments  in  their 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      283 

properties  up;  business  had  forged  ahead  so  fast  that  they 
had  not  kept  up  with  the  demands  of  the  public. 

The  chief  witness  on  credit  for  the  railroads  in  1917,  Mr. 
Oldham,  from  Boston,  admitted,  on  cross-examination,  that 
railroads  could  borrow  money,  as  a  class,  at  a  better  rate  than 
any  other  industry  in  the  United  States.  Mr.  Rea  was  chal- 
lenged to  name  one  company  in  any  business  that  could  get 
money  at  a  better  rate  than  his  company  could,  and  he  could 
not. 

I  am  not  asking  you,  gentlemen,  to  reach  conclusions  on  the 
basis  of  the  facts  that  I  am  stating;  I  simply  want  to  chal- 
lenge your  attention  to  the  fact  that  there  are  two  sides  to 
these  questions,  and  they  are  not  problems  that  ought  to  be 
decided  off-hand,  with  resolutions  passed  at  a  mass  conven- 
tion, one  way  or  the  other.  You  have  created  a  disinterested 
body,  with  no  axes  to  grind,  and  you  ought  to  be  content  to 
leave  it  to  them  to  decide  the  facts. 

In  1917,  when  a  15  per  cent,  case  was  being  tried,  the  rail- 
roads' own  exhibits  showed — for  the  Eastern  District,  where 
they  had  prepared  the  figures  in  detail — that  the  Eastern  rail- 
roads, as  a  whole,  had  an  unappropriated  surplus  of  approxi- 
mately one  hundred  million  dollars.  Now,  if  they  needed  more 
cars  and  engines,  why,  under  the  shining  canopy,  didn't  they 
buy  them  ? 

For  the  preceding  year  they  showed  another  unappropriated 
surplus  above  all  expenses,  all  taxes,  all  interest  on  bonds  and 
debt,  of  approximately  one  hundred  millions  of  dollars.  Now, 
I  say  deliberately,  the  record  will  show  you  that  the  railroads 
at  the  present  time  are  delaying  purchases  and  have  been  de- 
laying purchases  because  they  have  been  waiting  for  prices  to 
come  down. 

There  are  many  facts  on  the  other  side  of  this  proposition. 
I  repeat  again,  my  object  is  not  to  persuade  you  to  vote  one 
way  or  the  other  on  the  question  of  adequacy  of  railway 
revenue ;  it  is  simply  to  show  you  the  two  sides. 

The  Government  Deficit 

During  the  past  two  years  there  have  been  deficits.  Last 
year  there  was  a  deficit  of  some  two  hundred  millions  and 
more.  Why?  Mr.  Hines  himself  has  outlined  it.  Those 


284         PROCEEDINGS  OP  AMERICAN  MINING  CONGRESS 

advances  in  wages  covered  the  entire  year,  and  the  advance 
in  rates  covered  only  six  months. 

In  the  present  year  there  has  been  a  deficit  of  something  like 
three  hundred  millions.  You  know  the  after-effects  of  the  war. 
Since  July  1  there  has  been  generally  a  surplus  above  the  guar- 
anteed return  for  the  railroads  as  a  whole  in  the  United  States. 
That  guaranteed  return,  as  I  stated  before,  represents  the 
most  prosperous  three-year  period  in  railroad  history.  For 
the  last  month  the  official  report,  that  of  September,  shows 
that  there  was  a  surplus  above  the  guaranteed  return  of  three 
millions,  after  paying  all  back  wages.  If  you  take  only  the 
increased  pay  properly  allotted  to  September,  there  was  a  sur- 
plus of  nineteen  millions,  according  to  the  latest  official  statis- 
tics given  out  by  Mr.  Hines. 

But  we  are  up  against  a  crucial  situation.  I  believe  it  would 
be  unfortunate  to  turn  the  railroads  back  to  their  owners 
without  some  provision  to  take  care  of  the  revenues  during 
the  next  six  months  or  year.  I  think  this  is  a  time  when  they 
must  be  carefully  protected;  we  are  still  passing  through  the 
throes  of  this  war;  business  has  not  settled.  If  you  make 
another  general  advance  in  freight  rates,  it  will  be  a  question 
of  only  a  few  months  until  labor  will  demand  another  wage 
advance,  and  you  will  start  the  old  cycle  again. 

I  think  the  standard  return  should  probably  be  extended  for 
a  period  until  normal  conditions  can  reassert  themselves. 

Proposed  Legislation 

Many  and  diverse  systems  of  regulating  our  common  car- 
riers have  been  proposed  during  the  past  six  months.  Sug- 
gestions have  come  from  railroad  officials,  security  holders, 
commissions  (State  and  Federal),  labor  organizations  and 
shippers.  Thousands  of  pages  of  testimony  have  been  taken 
bearing  upon  this  vast  array  of  proposed  schemes.  A  measure 
recently  introduced  in  Congress,  and  championed  by  railroad 
security  holders,  provides  many  basic  changes. 

First,  this  measure  proposes  to  create  a  Transportation 
Board,  to  which  shall  be  delegated  many  of  the  functions  now 
exercised  by  the  Interstate  Commerce  Commission.  This  board 
is  also  to  have  authority  to  make  recommendations  and  find- 
ings as  to  the  financial  needs  of  the  carriers,  concerning 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      285 

increases  in  rates,  etc.,  without  any  necessity  to  have  public 
hearings  before  reaching  conclusions. 

It  is  true  that  final  power  to  make  orders  relative  to  rates 
rests  with  the  Interstate  Commerce  Commission.  But,  pray 
tell  me,  what  chance  would  the  attorney  for  a  few  shippers 
have  with  all  the  railroads  in  the  nation  lined  up  against  him, 
and  a  department  of  the  Federal  Government  created  by  Con- 
gress, and  appointed  by  the  President,  also  against  him? 

Second,  this  bill,  which  the  railroad  security  holders  are 
championing,  provides  what  amounts  to  a  Government  guar- 
anty of  from  5!/2  to  6  per  cent,  on  the  value  of  our  railroads. 
This  means,  in  the  light  of  court  decisions  as  interpreted  by 
these  same  railroad  gentlemen,  from  S1/^  to  6  per  cent,  on  the 
present  cost  of  reproduction  of  our  entire  transportation  sys- 
tem, at  the  present  high  level  of  prices  for  labor  and  materials. 
We,  as  a  people,  would  hesitate  long  before  entering  upon  such 
a  task  under  present  conditions ;  and  yet  these  security  holders 
are  to  be  treated  as  though  they  had  done  that  very  thing. 
And  the  American  shipper  is  to  be  taxed  to  pay  the  bill. 

In  the  mining  industry  you  gentlemen  have  known  some 
extraordinary  rates  of  return,  and  yet,  generally,  they  have 
not  been  guaranteed  by  the  Government.  What  constitutes  a 
reasonable  rate  varies  with  the  hazard  of  the  industry  involved, 
and  varies  with  the  season.  That  is  not  a  matter  that  should 
be  fixed  by  statute. 

Attacks  Proposed  Guarantee 

Five  and  one-half  to  six  per  cent,  may  be  a  modest  return  on 
normal  values  in  a  private  industry.  But  51/2  to  6  per  cent, 
on  the  present  cost  of  reproduction,  and  that  return  guaranteed 
by  the  United  States  Government,  is  a  far  different  thing. 
Would  you  recommend  the  withdrawal  of  outstanding  Govern- 
ment bonds  with  the  statement  to  the  bondholders,  "You  peo- 
ple have  put  your  money  into  these  bonds  at  3%  to  4%  per 
cent.,  interest  rates  have  risen,  and  instead  of  those  4  per  cent, 
bonds  please  accept  this  6  per  cent.  Government  bond"  ?  Such 
an  act  would  not  be  countenanced  by  the  sane  business  men  of 
the  country,  and  yet  this  is,  in  substance,  what  the  Cummins 
bill  proposes  to  do  for  railroad  security  holders. 

Five  and  one-half  to  six  per  cent,  on  the  cost  of  reproduction 


286         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

would  mean  7  to  9  per  'cent,  on  the  capital  stock,  because  two- 
thirds  of  railroad  capital  is  represented  by  bonds.  For  some 
companies  this  will  mean  20,  30  and  as  high  as  100  per  cent. 

Railroad  Earnings 

I  have  in  my  hand  the  list  of  companies  showing  the  amount 
that  the  present  standard  return  produces  on  their  present 
capital  stock,  after  paying  their  expenses,  taxes  and  interest. 
This  list  was  compiled  by  the  present  chairman  of  the  Senate 
Committee,  who  is  the  author  of  the  bill  we  have  been  dis- 
cussing; this  list  was  introduced  as  a  part  of  his  minority 
report  last  year.  Listen  to  some  of  his  figures : 

Railroad.  Per  Cent. 

Pennsylvania  Railroad 8.92 

Pennsylvania  Company 11.92 

New  York  Central  Railroad  Co 12.96 

Philadelphia  &  Reading  Railway  Co 25.70 

Delaware,  Lackawanna  &  Western  Railroad  Co 32.90 

Michigan  Central  Railroad  Co 18.48 

Central  Railroad  Company  of  New  Jersey 20.25 

Philadelphia,  Baltimore  &  Washington  Railroad  Co 11.50 

Hocking  Valley  Railroad  Co 11.94 

Illinois  Central  Railroad  Co 11.33 

Louisville  &  Nashville  Railroad  Co 16.75 

Norfolk  &  Western  Railway  Co 12.51 

Chesapeake  &  Ohio  Lines 9.31 

Atlantic  Coast  Line  Railroad  Co 10.80 

Central  of  Georgia  Railway  Co 9.39 

Nashville,  Chattanooga  &  St.  Louis  Railway 13.60 

Mobile  &  Ohio  Railroad 14.76 

Cincinnati,  New  Orleans  &  Texas  Pacific  Railway  Co 44.99 

Florida  East  Coast  Railway  Co 10.06 

Chicago  &  Northwestern  Railway  Co 10.18 

Chicago,  Burlington  &  Quincy  Railroad  Co 22.05 

Minneapolis,  St.  Paul  &  Sault  St.  Marie  Railway  Co 12.09 

Chicago,  St.  Paul,  Minneapolis  &  Omaha  Railway  Co 9.57 

Atchison,  Topeka  &  Santa  Fe  Railway  Co 9.70 

Southern  Pacific  Company 6.60 

Chicago,  Milwaukee  &  St.  Paul  Railway  Co 6.15 

Great  Northern  Railway  Co 9.63 

Northern  Pacific  Railway  Co 9.87 

Union  Pacific  Railroad  Co 9.64 

Bessemer  &  Lake  Erie  Railroad  Co 647.22 

Chicago  &  Erie  Railroad  Co ; 70.45 

New  York,  Philadelphia  &  Norfolk  Railroad 35.74 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY       287 

Railroad.  Per  Cent. 

Cumberland  Valley  Railroad  Co 24.01 

Lehigh  &  Hudson  River  Railway  Co 27.98 

Charleston  &  Western  Carolina  Railway  Co 21.67 

Duluth,  Missabe  &  Northern  Railway  Co 114.12 

Duluth  &  Iron  Range  Railroad  Co 38.27 

Panhandle  &  Santa  Fe  Railroad  Co 64.37 

St.  Louis,  Brownsville  &  Mexico  Railroad 52.71 

Colorado  &  Wyoming  Railroad  Co 162.64 

I  do  not  vouch  for  these  figures ;  I  have  never  checked  them. 
Suffice  it  to  say,  they  are  prepared  by  officials  at  Washington 
and  introduced  into  the  Senate  records  by  the  present  chair- 
man of  the  Senate  Committee.  There  is  some  income  from 
outside  sources  in  that. 

I  made  a  check  for  the  Eastern  District,  subtracting  all  of 
that.  I  found  that  the  railroads  as  a  whole,  for  representative 
recent  years,  rich  and  poor,  big  and  little,  were  able  to  pay  all 
their  expenses  and  all  their  interest  and  had  over  8  per  cent, 
left  on  all  their  capital  stock  outstanding  in  the  hands  of  the 
public. 

Revenue  Sources 

There  are  various  ways  of  making  increases  in  revenues. 
Some  folks  do  it  by  general  advances.  One  way  of  increasing 
the  charges  the  railroads  have  been  making  in  the  past  is  by 
putting  charges  on  terminal  service,  on  switching,  etc. ;  pretty 
soon  they  will  tackle  your  mining  cars.  Many  of  these  services 
we  have  thought  have  been  included  as  a  part  of  the  rate. 
They  are  proposing  to  put  a  charge  for  hauling  the  ice  in  the 
bunker ;  they  are  proposing  to  charge  for  unloading  live  stock, 
for  unloading  it  in  the  yards.  Many  of  us  have  thought  those 
were  included  in  the  rate.  I  have  a  little  story  illustrating  that 
thought;  I  think  it  might  relieve  things  just  a  moment. 

There  was  a  painter  "over  there"  repairing  one  of  the 
cathedrals  that  had  been  injured,  and  he  put  in  a  bill  for  $58. 
He  had  a  lot  of  things  merged,  and  the  people  who  checked  it 
over  wanted  it  itemized,  so  he  recompiled  his  bill  as  follows : 

Embellished  Pontius  Pilate  and  put  a  ribbon  on  his 

bonnet $5.02 

Put  a  tail  on  the  rooster  of  St.  Peter  and  mended  his 

comb  .  3.20 


288         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Replumed  and  gilded  the  left  wing  of  the  guardian  angel.  4.18 
Washed  the  servant  of  the  high  priest  and  put  carmine 

on  his  cheek 5.12 

Corrected  the  Ten  Commandments 5.72 

Rebordered  the  robe  of  Herod  and  readjusted  his  wig. . . .  4.18 
Put  a  new  spotted  sash  on  the  son  of  Tobias,  dressed  his 

sash  5.00 

Cleaned  the  ears  of  Balaam's  ass  and  shod  him 3.02 

Put  earrings  in  the  ears  of  Sarah 2.04 

Put  a  stone  in  David's  sling,  enlarged  the  head  of  Goliath 

and  extended  his  legs 3.02 

Decorated  Noah's  ark 3.00 

Mended  the  shirt  of  the  Prodigal  Son  and  cleaned  his 

ears  4.00 

Improved  Heaven,  adjusted  the  stars,  cleaned  the  moon. .  7.15 
Reanimated  the  flames  of  hell,  put  a  new  tail  on  the 

devil,  mended  his  left  hoof,  and  did  several  odd  jobs 

for  the  damned..  7.27 


Total   $58.00 

[Laughter.] 

There  are  few  industries  in  America  that  are  earning  in  the 
aggregate,  for  rich  and  poor  all  combined,  6  per  cent,  on  the 
total  cost  of  reproducing  the  entire  industry  at  present  prices. 

An  Unsound  Experiment 

A  Government  guaranty  to  private  industry  is  something 
new;  it  would  be  an  experiment  in  the  science  of  government, 
and  it  would  be  fundamentally  unsound.  The  principal  argu- 
ment you  have  against  the  socialistic  propaganda  of  today  is 
the  necessity  to  preserve  the  personal  initiative.  Anything 
savoring  of  a  Government  guaranty  would  tend  to  take  away 
that  very  incentive  which  is  at  the  basis  of  present-day  civil- 
ization, which  has  made  progress  possible.  Such  a  guaranty 
would  cause  an  increase  in  our  present  standard  return,  and, 
therefore,  of  our  present  railroad  deficit,  of  more  than  one 
hundred  million  dollars  annually. 

Third,  the  Cummins  bill  provides  for  the  compulsory  con- 
solidation of  our  railway  companies  within  a  limited  period  of 
time.  I  doubt  very  much  if  you  can,  under  any  construction 
or  theory,  lawfully  compel  one  railway  company  to  sell  its 
property  to  another  railway  company,  to  be  used  for  like  public 
purposes. 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      289 

I  want  to  say  those  three  features  of  the  Cummins  bill— 
the  guaranty,  the  transportation  board  and  the  compulsory 
consolidation — have  all  been  kept  out  of  the  Esch  bill  in  the 
House,  although  tremendous  pressure  has  been  brought  to 
bear  to  put  those  features  in  the  bill. 

Power  of  Regulation 

One  other  matter  was  touched  upon,  and  that  was  State 
regulation.  But  I  must  not  take  time  to  discuss  it ;  I  only  ask 
you,  gentlemen,  to  pause  and  weigh  carefully  before  you 
attempt  to  change  the  present  balance  of  power  between  our 
State  and  Federal  governments.  What  is  it  that  makes 
America  stand  out  unique  in  all  history;  is  it  because  of  a 
great  centralized  power?  No;  it  is  because  of  that  check  and 
balance,  the  State  government  and  the  Federal  Government. 
The  State  government  is  far  closer  to  the  needs  and  demands 
of  the  local  community ;  it  is  that  scheme  of  government  that 
was  devised  by  our  forefathers  that  constitutes  the  greatest 
contribution  America  has  made  to  the  science  of  government. 

A  century  ago  there  was  a  tendency  toward  too  much  decen- 
tralization, and  it  took  a  John  Marshall  to  check  the  movement. 
Today  there  is  a  tendency  toward  too  much  centralization. 
We  must  have  men  arise  who  will  protect  us  from  that  other 
danger,  because  either  extreme  is  hostile  to  the  fundamental 
principle  upon  which  the  American  Government  has  been 
founded,  and  that  very  plan  has  been  followed  by  other  nations 
on  earth. 

The  British  Empire  has  found  it  necessary  to  abandon  one 
great  central  power,  to  follow  the  precedent  established  by  the 
United  States.  They  are  divided  up  into  many  different 
sovereignties,  all  combined  into  one  federated  organization. 

Nothing  has  been  proposed  in  recent  years  involving  more 
radical  changes  in  our  former  system  of  railroad  regulation 
than  that  presented  in  the  Cummins  bill,  now  pending  before 
the  United  States  Senate. 

Out  of  the  conglomeration  of  schemes  and  ideas  and  sys- 
tems that  have  been  presented  during  the  past  few  months 
one  thought  impresses  itself  upon  our  minds:  We  are  in  a 
critical  period,  a  transition  era.  Business  everywhere  is  in  an 
uncertain  condition;  revolutions  and  strikes  are  the  order  of 


290         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  day  in  all  parts  of  the  world ;  several  millions  of  men  are 
leaving  army  life  for  industrial  pursuits;  all  parties  are  hesi- 
tating, waiting  for  lower  prices  on  essential  commodities.  It 
is  difficult  for  anyone  to  see  30  days  ahead.  Of  all  times,  this 
is  the  most  unfortunate  to  suggest  radical  changes  and  experi- 
ments that  will  render  conditions  still  more  chaotic.  [Applause.] 

No  Time  for  Radical  Change 

If  we  must  have  change,  let  us  wait  until  things  have  quieted 
down ;  until  we  can  have  an  opportunity  calmly  and  thoroughly 
to  discuss  and  analyze  the  merits  and  demerits  of  the  various 
propositions  suggested,  without  living  in  constant  fear  of  what 
is  going  to  happen  to  us  next  week  or  next  month. 

It  would  be  wise  not  to  make  any  general  change  in  the 
standard  return  now  received  by  our  railroads.  At  the  present 
time  we  are  still  feeling  the  after-effects  of  the  war.  Normal 
peace  conditions  have  not  been  restored.  Unsettled  conditions 
at  home  and  abroad,  strikes  of  far-reaching  character,  and 
many  other  factors  have  caused  a  distressing  condition  in  our 
industry.  Another  sweeping  advance  in  freight  rates  would 
be  a  most  unfortunate  incident  in  our  industrial  life  at  the 
present  moment.  It  would  add  to  the  present  uncertain  con- 
dition of  affairs  another  source  of  trouble  and  confusion;  it 
would  probably  be  followed  within  a  few  months  by  another 
demand  for  higher  wages,  and  we  should  have  the  unending 
circle  in  operation  again.  Some  jobbers  in  our  cities  could 
readily  pass  on  the  burden.  Other  people  could  not,  and  on 
them  the  burden  would  be  especially  severe. 

In  the  light  of  our  experience  with  governmental  bodies 
during  the  past  two  years,  I  suggest  two  propositions  in  con- 
nection with  this  transportation  question: 

First,  let  us  have  no  more  changes  in  rates,  rules,  or  regu- 
lations effecting  disturbances  in  present  conditions,  rate  rela- 
tionships, or  causing  increased  charges  on  traffic  as  a  whole, 
or  increased  operating  burdens  on  any  individual  industry, 
without  a  full,  free,  open,  public  hearing  by  a  disinterested 
tribunal  where  both  parties  are  heard  and  know  what  the  other 
side  is  presenting. 

Second,  let  us  abandon  all  other  revolutionary  changes  that 


EFFECT  OF  RAILWAY  RATES  ON  MINING  INDUSTRY      291 

are  contemplated  which  would  disturb  existing  commercial 
conditions  on  which  business  has  become  established. 

In  conclusion,  please  pardon  a  few  words  of  a  more  general 
character  concerning  something  that  is  uppermost  in  the  minds 
of  all  parties  at  the  present  moment ;  something  that  is  closely 
akin,  however,  to  that  which  we  have  been  discussing. 

I  want  to  say  before  I  leave  that  railroad  question :  Do  not 
misunderstand  me  that  I  say  the  railroads  are  not  entitled  to 
more  money;  do  not  misunderstand  me  to  say  the  railroad 
facilities  are  adequate.  I  have  said  neither,  and  a  man  who 
goes  away  quoting  me  to  that  effect  is  misrepresenting  my 
position.  All  I  have  said  is  that  before  those  changes  are 
made  let  them  be  submitted  to  a  disinterested  tribunal  unem- 
barrassed by  adverse  findings  of  any  other  governmental  body. 

Industrial  Problems  Vital 

In  lieu  of  the  world  war,  there  are  some  problems  in  industry 
between  the  employer  and  the  employee,  between  organized 
business  and  the  public  at  large,  that  are  challenging  the 
thought  of  the  whole  human  race.  In  the  counting  room,  in 
the  shop,  in  the  field,  in  the  court  room,  and  in  the  legislative 
halls  of  state  and  nation,  the  discussion  is  centering  about 
these  great  industrial  issues. 

There  are  some  who  fear  that  international  wars  will  be 
succeeded  by  industrial  warfare.  It  would  be  difficult  to  esti- 
mate which  would  be  more  unfortunate,  more  costly  to  human- 
ity. Some  other  way  out  must  be  found.  Some  method  must 
be  devised  for  the  peaceful  solution  of  these  questions — a 
method  that  will  protect  the  just  rights  of  all  parties,  if  you 
and  I  expect  to  hand  down  to  our  children,  and  to  our  children's 
children,  the  fruits  of  2,000  years  of  Christian  civilization.  One 
road  leads  to  welfare  and  progress,  the  other  leads  to  destruc- 
tion and  anarchy.  We  of  today  must  make  the  choice. 

So  many  startling  and  unprecedented  events  in  government 
and  industry  have  happened  during  the  past  few  years  that 
we  have  been  shaken  loose  from  our  moorings.  It  is  as  though 
the  human  race  had  gone  out  on  one  long  spree,  precipitating 
a  perfect  orgy  of  reckless  disregard  for  the  good  things  of 
life,  the  things  that  have  been  carefully  worked  out  by  the 
struggle  and  labor  of  generation  after  generation  for  centuries. 


292         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  is  time  for  humanity  to  call  a  halt.  Let  us  quit  this  ever- 
lasting wrangling  and  fighting  and  get  down  to  business. 

The  commerce  of  the  world  is  beckoning  to  us.  Today 
America  has  the  greatest  opportunity  to  take  the  lead  indus- 
trially among  the  nations  of  the  earth  that  has  ever  befallen 
the  inhabitants  of  this  continent  since  Columbus  touched  these 
shores  427  years  ago.  We  must  not  let  this  chance  go  by. 
And  by  so  doing  we  will  set  an  example  for  the  peoples  of 
other  countries  that  will  be  for  the  good  of  mankind. 

The  suggestion  of  paramount  importance  which  we  have  to 
offer  is  to  preserve  the  present  situation  with  the  least  jar  or 
change  that  may  be  necessary,  until  normal  conditions  once 
more  exist  in  American  industry;  and  then  let  us  restore,  at 
the  earliest  possible  moment,  pre-war  conditions,  abandoning, 
for  the  present,  all  idea  of  experiments  and  wholesale  revolu- 
tionary changes  in  industry  and  government.  I  thank  you. 
[Applause.] 


HOLMES  MEMORIAL  ASSOCIATION 


HOLMES  MEMORIAL   ASSOCIATION 

Report  on  the  Progress  of  the  Joseph  A.  Holmes  Safety  Association. 

Submitted  to  The  American  Mining  Congress  by 

DR.  DAVID  T.  DAY,  President 

One  of  the  great  men  who  effected  co-operation  between  the 
many  diverse  interests  in  the  mining  industry  was  Dr.  Joseph 
A.  Holmes.  For  this  purpose  he  strove  for  the  development  of 
The  American  Mining  Congress.  You  of  the  Congress  have 
already  recognized  this  by  aiding  in  the  establishment  of  a 
suitable  memorial  to  Dr.  Holmes — the  Joseph  A.  Holmes  Safety 
Association,  which  is  devoted  to  carrying  on  Dr.  Holmes'  work 
of  advancing  safety  in  mining. 

It  is  a  pleasure  as  secretary  of  the  Association  and  as  a 
member  of  the  committee  which  this  Congress  has  appointed 
for  this  memorial  to  submit  an  account  of  the  progress  which 
has  been  made  by  this  Association.  As  you  all  know,  the 
Association  is  composed  of  representatives  of  all  National 
Mining  Societies,  including  this  Congress,  The  Bureau  of  Mines, 
The  U.  S.  Geological  Survey,  The  Smithsonian  Institution,  The 
American  Federation  of  Labor  and  appropriate  National  Scien- 
tific Societies. 

In  promoting  safety  in  mining  the  Association  uses  two 
means — first,  the  recognition  of  heroic  work  in  the  saving  of 
life ;  and  second,  recognition  of  those  who  developed  new  appli- 
ances or  methods  of  managing  men  so  as  to  advance  safety. 

Under  the  presidency  of  Dr.  Van  H.  Manning,  the  Associa- 
tion began  the  raising  of  a  fund  of  money  sufficient  to  make 
the  work  effective.  Up  to  this  date  a  fund  of  over  $10,000 
has  been  collected.  When  the  war  began  the  calls  for  money 
for  war  necessities  made  it  advisable  to  suspend  the  collection 
of  funds  during  the  period  of  the  war,  but  the  accrued 
interest  even  on  the  fund  already  collected  has  proved  sufficient 
for  beginning  the  Association's  work.  A  committee  on  awards 
has  been  selected,  of  which  Mr.  J.  W.  Paul  is  chairman,  and 
the  following  awards  have  been  announced — all  of  them  for 
deeds  of  heroism  so  remarkable  as  to  leave  no  question  of  the 
justice  of  the  award. 


294         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  will  be  noted  that  of  the  15  recipients  of  these  awards 
7  died  in  the  acts  of  heroism  for  which  the  Association  honors 
them. 

To  each  man,  or  to  his  nearest  of  kin,  will  be  given  the  gold 
medal  of  the  Association  and  a  diploma  upon  which  will  be 
inscribed  an  enduring  record  of  his  brave  act  of  devotion  to 
his  fellow-men. 

The  work  thus  begun  will  go  forward  as  actively  and  the 
search  for  the  most  meritorious  men  will  be  as  far-reaching 
as  the  funds  of  the  Association  will  permit.  With  no  salaried 
man  in  the  organization,  with  the  work  in  the  charge  of  men 
who  were  devoted  to  Dr.  Holmes  and  his  work,  this  Associa- 
tion now  becomes  a  safe  line  of  mining  activity  to  support. 
Now  that  the  war  exigencies  are  past,  it  is  easy  to  increase 
greatly  the  influence  for  safety  of  this  Association  by  increas- 
ing its  fund  many  fold,  and  this  without  any  great  drain  on 
any  individual  or  corporation.  The  secretary  in  this  connection 
wishes  to  publicly  recognize  the  faithful  contribution  of  one 
mining  local  in  West  Virginia  which  sends  in  its  modest  con- 
tribution as  surely  as  the  months  roll  around;  it  is  a  great 
example  for  other  mining  labor  organizations  to  follow.  I  feel 
sure,  moreover,  that  the  Association  is  proving  itself  a  prac- 
tical aid  to  mining  safety. 

Respectfully  submitted, 

DAVID  T.  DAY, 

Secretary. 

Diploma  and  gold  medal  awarded 

ROBERT  BRENNAN,  Butte,  Mont., 

brother  of  Neal  Brennan,  who  lost  his  life,  along  with  William  G.  Mitchell, 
in  the  Pennsylvania  Mine  of  the  Anaconda  Copper  Mining  Company, 
Butte,  Mont.,  on  February  14,  1916,  while  attempting  to  locate  and  rescue 
two  miners  who  were  imprisoned  by  the  gases  and  smoke  from  a  fire 
raging  in  the  mine  that  took  the  lives  of  21  men. 

Diploma  and  gold  medal  awarded 

MARY  J.  MITCHELL,  Butte,  Mont., 

widow  of  William  G.  Mitchell,  who  lost  his  life,  along  with  Neal  Brennan, 
in  the  Pennsylvania  Mine  of  the  Anaconda  Copper  Mining  Company, 
Butte,  Mont.,  on  February  14,  1916,  while  attempting  to  locate  and  rescue 
two  miners  who  were  imprisoned  by  the  gases  and  smoke  from  a  fire 
raging  in  the  mine  that  took  the  lives  of  21  men. 


HOLMES  MEMORIAL  ASSOCIATION  295 

Diplomas  and  gold  medals  awarded 

GRANITE  J.  FROWEN,  Butte,  Mont., 

and 
THOMAS  COONEY,  Butte,  Mont., 

in  recognition  of  the  hazardous  risks  taken  by  them  following  the  mine 
fire  in  the  Pennsylvania  Mine  of  the  Anaconda  Copper  Mining  Company, 
Butte,  Mont.,  on  February  14,  1916,  in  which  fire  21  lives  were  lost, 
including  two  rescuers.  Fro  wen  and  Cooney  not  only  warned  the  miners 
employed  in  two  different  levels,  but  led  parties  of  miners  in  a  state  of 
exhaustion  to  a  point  of  safety,  thus  saving  the  lives  of  at  least  15  of 
their  fellow- workers. 

Diploma  and  gold  medal  awarded 

JESSIE  BURRELL  JONES,  6332  Douglas  Avenue,  Pittsburgh,  Pa., 

widow  of  Lewis  Meredith  Jones,  who  lost  his  life  in  the  Barrackville 
No.  7  Mine  of  the  Jamison  Coal  and  Coke  Company,  Barrackville,  W.  Va., 
on  October  20,  1916,  while  directing  the  work  of  a  rescue  crew  in  an 
effort  to  locate  10  miners  who  had  been  imprisoned  by  an  explosion  within 
the  mine  on  October  19,  1916,  and  who  were  later  found  dead. 

Diploma  and  gold  medal  awarded 

MADGE  DUGAN,  Butte,  Mont., 

widow  of  Manus  Dugan,  in  recognition  of  the  hazardous  risk  taken  by 
her  husband  in  the  Speculator  Mine  of  the  North  Butte  Mining  Company, 
Butte,  Mont.,  on  June  8,  1917,  following  a  fire  in  the  mine  that  imprisoned 
many  miners  and  caused  the  loss  of  162  lives.  Twenty-seven  men  were 
saved  from  death  by  the  acts  of  Manus  Dugan,  who  collected  the  men 
and  directed  the  construction  of  a  barricade  that  protected  them  against 
the  deadly  gases.  Dugan  later  became  separated  from  the  party  and  lost 
his  life.  , 

Diploma  and  gold  medal  awarded 

ELIZABETH  LELIA  FARMER,  Havaco,  W.  Va., 

widow  of  John  Calvin  Farmer,  who  lost  his  life  on  December  21,  1918, 
in  the  Havaco  Mine  of  the  New  River  and  Pocahontas  Consolidated  Coal 
Company,  Havaco,  W.  Va.,  while  attempting  to  locate  two  miners  who 
were  imprisoned  by  an  explosion  in  the  mine  and  who  lost  their  lives. 

Diploma  and  gold  medal  awarded 

THOMAS  JONES,  Speedwell,  Tenn., 

father  of  Samuel  Jones,  who  lost  his  life  on  December  21,  1918,  in  the 
Havaco  Mine  of  the  New  River  and  Pocahontas  Consolidated  Coal  Com- 
pany, Havaco,  W.  Va.,  in  an  effort  to  rescue  John  Calvin  Farmer,  who 
lost  his  life. 


296         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Diplomas  and  gold  medals  awarded 

GEORGE  WASHINGTON  KEITH,  Havaco,  W.  Va., 
HENRY  CLAY  TURNER,  Maitland,  W.  Va., 
ADAM  B.  MITCHELL,  Fort  Gay,  W.  Va. 

These  awards  are  made  in  connection  with  the  hazardous  risk  volun- 
tarily taken  by  these  men  in  an  effort  to  rescue  the  lives  of  men  engaged 
in  rescue  work  in  the  Havaco  Mine  of  the  New  River  and  Pocahontas 
Consolidated  Coal  Company,  Havaco,  W.  Va.,  following  the  explosion  in 
the  mine  on  December  21,  1918. 

G.  W.  Keith,  in  an  effort  to  rescue  John  Farmer,  was  overcome  and 
was  rescued  by  Clay  Turner  and  Adam  Mitchell,  who  crawled  to  the 
stricken  rescue  crew  and  succeeded  in  bringing  Keith  to  fresh  air,  where 
he  revived. 

Diploma  and  gold  medal  awarded 

MARTHA  HARDY,  Dunbar,  Pa., 

widow  of  Samuel  Hardy,  who  lost  his  life  in  the  Mount  Braddock  Mine 
of  W.  J.  Rainey,  Mount  Braddock,  Pa.,  on  January  20,  1919,  while,  with 
Clyde  Foltz,  making  an  effort  to  rescue  six  men  who  were  imprisoned 
by  smoke  and  gases  from  a  fire  within  the  mine. 

Diploma  and  gold  medal  awarded 

THELMA  ETHEL  FOLTZ,  Dunbar,  Pa., 

widow  of  Clyde  Foltz,  who  lost  his  life  in  the  Mount  Braddock  Mine  of 
W.  J.  Rainey  while,  with  Samuel  Hardy,  making  an  effort  to  rescue  six 
men  who  were  imprisoned  by  smoke  and  gases  from  a  fire  within  the 
mine. 

Diplomas  and  gold  medals  awarded 

MICHAEL  SOFTCHECK,  Orient,  Pa., 
FRANK  KRUM,  Orient,  Pa., 
AUGUST  KLAUS,  Orient,  Pa, 

in  recognition  of  the  hazardous  risk  these  men  took  in  the  rescue  of 
Herman  Earhart  and  Clyde  Livingston  in  the  Mount  Braddock  Mine  of 
W.  J.  Rainey,  Mount  Braddock,  Pa.,  on  January  20,  1919.  These  men 
appeared  on  the  scene  in  answer  to  a  call  for  assistance,  and  upon  their 
arrival  found  that  two  men  had  lost  their  lives  in  an  effort  to  enter  the 
mine.  .They  proceeded  on  foot  and  traveled  4,000  feet  and  located  Her- 
man Earhart  and  Clyde  Livingston  in  a  semi-conscious  condition  from 
the  effects  of  the  gases  from  a  fire  within  the  mine.  These  rescuers 
telephoned  for  a  trip  of  empty  cars,  which  was  lowered  from  the  surface 
and  the  two  semi-conscious  men  were  loaded  into  the  car  and  hauled  to 
the  surface.  Although  unconscious  upon  reaching  the  surface,  they  later 
recovered. 


BY-PRODUCT  COKING  297 


BY-PRODUCT  COKING,  A  MEANS  OF  CONSERVING 
OUR  FUEL  RESOURCES 

By  JOSEPH  D.  DAVIS,  Assistant  Supervising  Chemist,  U.  S.  Bureau 

of  Mines 

(Presented  by  Permission  of  the  Director  of  the  Bureau  of  Mines) 

In  general,  it  may  be  said  that  the  more  plentiful  a  material 
is  the  more  we  are  prone  to  carelessness  in  its  utilization. 
Modern  commercialism  is  not  altruistic  to  the  extent  of  invest- 
ing large  capital  for  the  benefit  of  future  generations  when  an 
immediate  return  on  such  investments  is  not  well  in  sight.  In 
the  case  of  our  natural  resources  the  capitalist  prefers  to  make 
only  such  investments  and  developments  as  promise  a  reason- 
able profit  quickly  and  to  rely  on  the  discovery  of  new  resources 
or  a  substitute  for  the  material  in  question  when  the  known 
supply  may  become  in  the  remote  future  exhausted.  Such  is 
the  case  now  with  our  coal  supply  in  the  United  States. 

Those  who  have  to  do  with  the  mining,  distribution  and 
utilization  of  coal  today  are  concerned  only  with  the  immediate 
problems  attendant  thereon.  With  the  producers  competition 
in  the  past  has  been  so  keen,  with  labor  costs  continually  in- 
creasing, that  the  resultant  tendency  has  been  toward  quantity 
production  somewhat  at  a  sacrifice  of  the  coal  itself  through 
wasteful  mining  methods.  The  cost  of  the  coal  is  the  least  im- 
portant factor  entering  into  the  costs  of  production  and  the 
natural  commercial  tendency  has  been  to  consider  lightly 
wastes  of  coal  that  do  not  directly  affect  production  costs. 
Incidentally,  competition  in  production  has  led  to  the  develop- 
ment of  labor-saving  mining  machinery  in  this  country  un- 
equaled  anywhere,  an  accomplishment  of  which  we  may  be 
justly  proud.  As  to  the  distribution  of  coal,  we  are  perhaps 
better  equipped  for  rapid  and  efficient  distribution  than  any 
other  country  in  the  world,  but  the  difficulty  is  that  coal  in  this 
country  is  too  cheap  to  bear  the  expense  of  freight  except  for 
distances  comparatively  limited;  other  freight,  on  account  of 
its  higher  value,  will  take  precedence  and  will  displace  coal  on 
the  longer  hauls.  It  is  not  to  be  understood  that  what  has  been 


298         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

said  is  an  argument  for  arbitrarily  setting  the  price  of  coal 
higher  and,  perhaps,  forcing  the  producer  to  adopt  less  waste- 
ful mining  methods  by  legislative  acts,  but  rather  be  it  said 
that  it  is  incumbent  on  ourselves  (each  and  every  one  of  us), 
who  are  the  consumers,  to  more  efficiently  make  use  of  the 
values  that  are  actually  in  the  coal  substance  which  we  buy. 

The  most  of  us  demand  bituminous  coal  for  heating  our 
dwellings  because,  normally,  bituminous  coal  is  the  cheapest 
fuel  on  the  market ;  it  is  what  we  have  always  been  accustomed 
to  use  and  we  are  satisfied  with  it ;  and  since  we  demand  fuel  of 
that  sort,  the  dealer  will  not  make  a  serious  effort  to  introduce 
any  other  fuel.  Some  of  us  who  are  fortunate  enough  to  live 
near  the  supply  of  anthracite  coal  and  who  have  become  accus- 
tomed to  its  use  know  that  it  is  greatly  superior  to  bituminous 
coal  for  domestic  heating.  We  will  pay  a  much  higher  price 
for  it  than  we  are  willing  to  pay  for  the  bituminous  coal.  Most 
bituminous  coals  obtainable  in  the  East  have  actually  a  higher 
heating  value  than  the  anthracite,  but  this  excess  heat  is  for  the 
most  part  wasted  when  the  coals  are  used  for  domestic  heating. 

Anthracite  as  Domestic  Fuel 

The  anthracite  is  more  satisfactory  in  every  way.  Its  ad- 
vantages may  be  stated  briefly  as  follows :  It  produces  prac- 
tically no  smoke;  no  soot  is  formed  to  clog  the  chimneys  and 
heating  surfaces  of  the  furnaces,  thereby  lowering  the  heating 
efficiency ;  in  a  city  where  anthracite  is  burned  householders  do 
not  have  to  contend  with  black  sooty  deposits  on  household  fur- 
nishings, and  the  whole  city  is  cleaner  than  one  where  bitu- 
minous coal  is  used;  anthracite  fires  require  little  attention, 
two  firings  a  day  being  for  the  most  part  sufficient ;  the  coal 
itself  is  cleaner  to  handle ;  anthracite  coal  gives  the  most  heat 
for  a  given  tonnage.  Most  of  us,  however,  cannot  obtain  an- 
thracite; it  is  estimated  that  the  supply  will  last  barely  a  hun- 
dred years  longer,  whereas  the  supply  of  bituminous  coal  will 
last  at  least  a  thousand  years. 

Coke  a  Substitute 

We  may  now  well  ask  if  there  is  not  a  substitute  fuel  for 
anthracite  coal.  The  answer  is  that  there  is.  Coke  made  from 
bituminous  coal  may  even  now  be  purchased  at  about  the  same 


BY-PRODUCT  COKING 


299 


I 


.oR.  ___  -i. 


R         B'jj 

83.4 


9S.6 
83.8  •« 


FIG.  1. 

PIGURE  1.— Diagrams  showing  the  chemical  composition  and  heat  efficiency 
of  the  several  ranks  of  coal.  Upper  diagram:  Comparative  heat 
value  of  the  samples  of  coal  represented  in  the  lower  diagram,  com- 
puted on  the  ash-free  basis.  Lower  diagram:  Variation  in  the  fixed 
carbon,  volatile  matter,  and  moisture  of  coals  of  different  ranks, 
from  lignite  to  anthracite,  computed  on  samples  as  received,  on 
the  ash-free  basis. 


U.  S.  Bureau  of  Mines  11928 


300         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

price  as  anthracite  coal;  it  is  approximately  the  equal  of  an- 
thracite in  so  far  as  concerns  the  actual  heat  of  combustion, 
and  possesses  the  same  properties  as  regards  cleanliness  and 
ease  of  firing.  Coke  is  easily  the  most  economical  domestic  fuel ; 
it  is,  in  fact,  the  fuel  that  will  be  demanded  in  the  future  when 
our  reserves  of  anthracite  are  exhausted  or  when  the  prices 
become  so  high  as  to  be  prohibitive  to  the  householder  of  mod- 
erate means;  further,  when  the  demand  for  coke  increases 
more  coke  ovens  will  be  installed,  and  the  use  of  the  by-products 
will  bear  a  large  part  of  the  burden  of  the  cost  of  the  raw  coal 
and  the  manufacture  of  coke  therefrom. 


By-Products  from  Coal 

It  may  be  of  interest  here  to  inquire  as  to  the  amount  of  by- 
products obtainable  from  bituminous  coal  and  as  to  their  value. 
Taking  one  ton  of  average  bituminous  coking  coal  as  a  basis 
and  putting  its  value  at  $4  to  $7  per  ton  (which  is  high  for 
normal  times),  by-products  as  follows  are  obtainable  by  the 
coking  process: 

.65 — .7  ton  of  coke,  worth  now $6.00  to  $7.00 

5,000  cubic  feet  of  gas,  worth  now 4.00  to  5.00 

3  gal.  motor  fuel,  worth  now 75  to  .90 

9  gal.  of  tar,  worth  now 25  to  .30 

25  Ibs.  ammonium  sulphate,  worth  now '.     1.00  to  1.25 


$12.00      $14.45 
Less  cost  of  coal . .  4.00          7.00 


$8.00        $7.45 
Cost  of  fabrication 1.20          1.50 

Increase  in  value $6.80        $5.95 

Now,  the  .65  ton  of  coke  obtainable  from  1  ton  of  coal  will 
do  as  much  heating  in  the  average  house-heating  furnace  as  the 
coal.  If  it  were  practicable  to  utilize  all  the  heat  the  bituminous 
coal  is  capable  of  giving  out,  this  of  course  would  not  be  the 
case,  since  in  the  making  of  the  coke  the  fuel  has  been  deprived 
of  the  above  quantities  of  combustible  gas,  tar  and  motor  fuel. 
However,  the  same  that  has  been  said  of  the  burning  of  anthra- 
cite coal  applies  likewise  to  the  burning  of  coke;  it  is  burned 


BY-PRODUCT  COKING  301 

more  efficiently  than  bituminous  coal.  There  is  no  question  but 
that  bituminous  coal  gives  out  more  heat  than  the  same  weight 
of  anthracite  coal,  but  in  the  case  of  the  coal  a  large  amount  of 
the  heat  is  wasted,  and  entirely  aside  from  the  fact  that  coke  is 
cleaner  and  the  firing  of  coke  requires  less  attention,  it  is 
actually  the  cheapest  fuel  to  use. 


Amount  of  Fixed  Carbons 

Referring  to  Figure  1,  on  the  lower  diagram,  the  lower 
spaces  shown  dark  correspond  to  the  relative  amounts  of  fixed 
carbon  (or  coke)  obtainable  from  the  various  grades  or  ranks 
of  coal;  the  middle  spaces  shown  light  represent  the  relative 
amounts  of  volatile  matter,  which,  in  the  house-heating  fur- 
nace, produce  soot  and  smoke  and  little  available  heat ;  and  the 
top  spaces,  shown  sectioned,  represent  the  moisture  or  water. 
In  the  diagram  above  are  given  the  relative  amounts  of  heat 
developed  by  burning  equal  weights  of  the  various  ranks  of 
coal  shown  in  the  lower  diagram,  the  number  of  heat  units 
being  shown  by  the  heavy  dark  spaces  directly  above  the  coal 
corresponding,  of  the  lower  diagram.  It  may  be  seen  that  all 
the  better  grades  of  bituminous  coal  actually  possess  a  higher 
heating  value  than  the  anthracite,  but  that  a  large  portion  of 
the  available  heat  is  bound  up  in  the  volatile  matter,  which  is 
known  to  be  difficult  to  burn  efficiently  in  small  furnaces.  In 
large  power  plant  installations  it  is  possible  to  burn  the  best 
grades  of  bituminous  coal  efficiently — that  is,  to  burn  the  vola- 
tile matter  completely  and  with  the  formation  of  very  little 
smoke  and  soot.  The  reasons  for  this  are  that  in  large  heating 
plants  the  fires  have  constant  attention  (or,  better,  automatic 
fuel-feeding  devices)  ;  the  large  furnaces  can  be  so  designed  as 
to  burn  all  the  volatile  matter,  and  special  devices  effectively 
absorb  the  heat  given  out.  In  such  large  plants,  therefore, 
bituminous  coal  is  the  best  fuel  to  use.  Not  all  the  bituminous 
coals  produce  coke  of  good  quality.  The  lowest  ranks,  in  fact, 
will  not  produce  coke  at  all.  The  bituminous,  except  those  of 
low  rank,  and  semi-bituminous  coals  will,  in  general,  produce 
good  coke,  the  higher  rank  bituminous  coals  being  considered 
best  for  making  coke  for  metallurgical  purposes. 


302         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Gas  for  Heating 

About  half  of  the  gas  made  in  the  by-product  process  is 
available  for  distribution,  the  other  half  being  used  for  heating 
the  ovens  during  the  coking.  The  gas  available  for  distribution 
is  admirably  suited  for  domestic  lighting  and  heating,  and  it  is 
also  quite  extensively  used  for  heating  metallurgical  furnaces. 
Where  cities  are  near  enough  to  bituminous  coal  fields  it  is 
thoroughly  practical  to  substitute  a  by-product  coke  oven  plant 
for  the  usual  city  gas  plant,  and  supply  the  city  with  by-product 
gas  instead  of  the  primary  coal  gas  or  enriched  producer  or 
water  gas,  as  the  case  may  be.  The  quality  of  the  coke  produced 
by  the  coal  gas  plants  is  not  usually  very  high,  the  main  object 
being  to  obtain  the  largest  possible  yield  of  gas  and  little  atten- 
tion being  paid  to  the  making  of  good  coke.  Producer  gas  con- 
tains a  high  percentage  of  carbon  monoxide,  which  is  quite  an 
active  poison,  and  the  gas  is  therefore  objectionable  for  that 
reason.  The  comparative  values  of  the  coal  gas  by-products 
and  those  of  the  by-product  ovens  except  as  regards  the  coke 
are  about  the  same,  differences  in  values  being  brought  about 
by  fluctuating  prices  of  the  by-products  themselves.  Producer 
and  water  gas  plants,  on  the  other  hand,  as  usually  operated, 
use  a  high-grade  fuel  and  produce  by-products  of  little  value 
compared  with  the  other  methods.  Where  this  process  is  used 
the  fuel  should  be  low-grade,  such  as  lignite  or  sub-bituminous 
coal;  or,  in  other  words,  fuels  that  will  not  make  good  coke. 
The  quality  of  the  gas  from  by-product  ovens  may  be  varied 
over  quite  a  range  with  comparative  ease  to  suit  requirements ; 
thus  the  richer  portion  of  the  gas  may  be  sent  into  the  gas 
mains  for  distribution  and  the  poorer  portion  used  for  heating 
the  ovens,  or  vice  versa;  or,  in  case  the  price  of  benzole  is  low, 
it  may  be  left  in  the  gas  distributed,  thereby  enriching  it  con- 
siderably. The  system  can  be  made  quite  flexible. 

Many  By-Products 

Benzole  produced  by  by-product  ovens  may  be  mixed  with 
gasoline  to  make  a  superior  grade  of  motor  fuel,  for  which  there 
will  be  an  increasing  demand  as  time  goes  on.  During  the  war 
benzole  was  extensively  used  to  make  phenol  (carbolic  acid), 
which  in  turn  was  used  to  make  the  explosives,  picric  acid  and 
ammonium  picrate,  which  went  into  high  explosive  shells.  One 


BY-PRODUCT  COKING  303 

company  in  the  United  States  was  producing  more  than  100,000 
pounds  of  picric  acid  per  day  just  prior  to  the  signing  of  the 
armistice.  Benzole  is  of  considerable  importance  as  a  solvent, 
particularly  with  the  paint  and  varnish  makers. 

The  number  of  valuable  chemical  products  obtainable  from 
coal  tar  is  almost  endless  and  their  value  hard  to  estimate.  The 
most  important  chemical  products  are  obtained  from  the  oils 
(light,  middle  and  heavy)  and  their  uses  will  perhaps  be  made 
more  evident  by  noting  the  end  products  of  the  different  chains. 
(See  Fig.  2.)*  Thus,  starting  with  heavy  oil,  we  find  crude 
carbolic  acid  intermediate  and  phenol,  cresols  and  disinfectants 
at  the  end  of  the  chain.  Picric  acid  might  also  have  been  men- 
tioned here.  Similarly,  the  chain  with  anthracene  oil  as  an 
intermediate  ends  with  dyestuffs,  and  the  number  of  different 
dyes  actually  obtained  from  all  the  oils  is  several  thousand. 
Briefly  stated,  perhaps  the  most  important  products  obtained 
are  dyestuffs,  explosives,  medicines  and  disinfectants.  The  uses 
to  which  refined  tar  and  pitch  are  put  will  be  self-evident.  It 
may  be  of  interest  here  to  state  that  sacharine,  a  compound 
that  has  about  two  hundred  times  the  sweetening  power  of 
sugar,  is  prepared  from  coal  tar.  Physicians  are  as  a  rule  in- 
clined to  believe  that  the  use  of  sacharine  is  harmful,  but  never- 
theless it  was  extensively  used  in  Europe  as  a  substitute  for 
sugar  during  the  war. 

Ammonia  Supply 

From  the  gas  works  and  coke  oven  plants  conies  our  supply 
of  ammonia,  on  which  source  of  supply  artificial  ice  plants  and 
refrigerating  systems  are  dependent.  This  ammonia  is  placed 
on  the  market  as  ammonium  sulphate,  compressed  ammonia 
gas  and  various  grades  and  strengths  of  ammonia  liquor.  Sul- 
phate of  ammonia  is  used  as  such  largely  in  commercial  fer- 
tilizers, for  which  there  is  a  large  and  increasing  demand. 
Nitrogen  is  an  essential  plant  food,  and  as  cultivation  becomes 
more  intensive  there  will  be  an  increasing  demand  for  fixed 
nitrogen  to  replace  that  taken  from  the  soil  by  the  crops.  The 
largest  users  of  compressed  ammonia  and  ammonia  liquor  in 
peace  times  are  the  ice  manufacturers  and  concerns  operating 
cold  storage  systems,  and  the  use  of  artificial  cold  has  vastly 


*  Courtesy  of  The  Barrett  Company. 


304         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


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BY-PRODUCT  COKING 


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U.  S.  Bureau  of  Mines  11578 


306         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

increased  in  importance  in  the  last  few  years.  For  instance,, 
the  packing  industry  of  today  is  absolutely  dependent  on  cold 
storage ;  except  for  cold  storage  it  would  be  impossible  to  pre- 
serve and  distribute  perishable  foodstuffs  to  anything  like  the 
extent  that  now  prevails.  The  annual  production  of  ammonia 
by  by-product  coke  oven  plants  alone  is  now  about  122,000  tons. 
This  ammonia,  together  with  about  33,000  tons  more  produced 
by  the  gas  works,  is  entirely  consumed  in  this  country. 

Explosives  in  Coal 

In  time  of  war  the  importance  of  ammonia  is  greatly  in- 
creased. For  the  manufacture  of  military  explosives  fixed 
nitrogen  in  the  form  of  nitric  acid  is  absolutely  necessary. 
Nitric  acid  can  readily  be  made  from  ammonia,  but  at  the  time 
that  the  world  war  broke  out  the  ammonia  supply  in  the  United 
States  was  not  nearly  great  enough  to  supply  war  demands  for 
fixed  nitrogen  and  at  the  same  time  supply  dependent  essential 
industries ;  besides,  the  price  of  ammonia  was  too  high  to  war- 
rant the  use  of  it  for  making  nitric  acid  in  competition  with 
sodium  nitrate  imported  from  Chile.  The  supply  of  sodium 
nitrate  from  that  source  was  sufficient  for  the  manufacture  of 
munitions  at  the  outbreak  of  the  war,  and  in  fact  during  the 
war  95  per  cent,  of  the  explosives  made  were  made  with  nitric 
acid  from  imported  sodium  nitrate.  There  was  a  possibility, 
however,  that  in  the  course  of  the  war  this  country  as  well  as 
the  Allies  would  be  cut  off  from  the  Chilean  source  of  supply  by 
the  enemy  submarines.  Accordingly,  in  all  the  Allied  countries 
preparations  were  being  made  to  fix  nitrogen,  principally  in  the 
form  of  ammonia,  in  order  to  become  independent  of  imports  in 
the  manufacture  of  nitric  acid,  and  hence  military  explosives. 
The  Congress  of  the  United  States  authorized  the  expenditure 
of  $200,000,000  for  the  erection  and  operation  of  plants  in  this 
country  for  the  production  of  synthetic  ammonia,  approxi- 
mately $110,000,000  of  which  was  spent  up  to  the  time  of  the 
signing  of  the  armistice,  and  several  of  the  larger  plants  were 
just  beginning  to  operate  at  that  time.  Allied  countries  were 
making  preparations  for  fixing  nitrogen  on  somewhat  the  same 
scale.  The  plants  of  the  United  States  Government  which  have 
been  built  are  now  shut  down,  pending  the  time  when  they  can 
be  made  to  compete  with  the  coke  ovens  for  the  normal  am- 


BY-PRODUCT  COKING  307 

monia  business.  Whether  or  not  they  will  ever  be  able  to  do  so 
is  a  question  that  cannot  yet  be  decided.  However  that  may  be, 
no  one  doubts  that  their  construction  as  a  precautionary  war 
measure  was  wise.  The  Government  was  simply  playing  safe 
in  the  matter  of  munitions  supply,  since  without  an  abundant 
supply  of  fixed  nitrogen  a  nation  playing  the  modern  game  of 
war  is  absolutely  helpless.  Our  Teutonic  enemies  had  foreseen 
this  contingency  and  were  prepared  for  it.  They  imported  no 
fixed  nitrogen  during  the  war,  but  were  fixing  at  the  close  of 
the  war,  according  to  late  reports,  somewhat  over  400,000  tons 
per  annum  of  nitrogen.  This  in  the  form  of  ammonia  would 
total  about  500,000  tons,  and  was  presumably  sufficient  to  sup- 
ply all  their  needs,  including  that  used  for  making  munitions. 
How  much  of  Germany's  fixed  nitrogen  supply  came  from  her 
coke  ovens  is  not  definitely  known ;  it  has  been  reported,  how- 
ever, that  the  by-product  coke  ovens  were  made  to  produce  coke 
far  in  excess  of  the  demands  in  order  that  the  output  of  am- 
monia be  sufficient  to  satisfy  demands  for  making  munitions. 
It  is  too  early  yet  to  predict  what  effect  the  war  developments 
of  methods  for  making  ammonia  will  have  on  prices  of  coke 
oven  ammonia,  but  it  seems  safe  to  say  that  with  the  ever- 
increasing  demands  for  ammonia  the  effect  will  be  slight,  in  so 
far  as  the  United  States  is  concerned,  at  least. 

Profit  in  By-Products 

Now,  it  has  been  shown  that  the  increased  value  per  ton  of 
coal  is  from  $6.80  to  $5.95  when  treated  by  the  by-product 
coking  process,  and  the  commercial  importance  of  the  by- 
products derived  therefrom  has  been  explained.  A  few  figures 
will  illustrate  the  enormous  strides  the  by-product  industry  has 
been  making  in  the  last  few  years,  most  of  the  coke  being  used 
for  metallurgical  purposes,  and  very  little  for  domestic  heating. 
The  total  number  of  ovens  in  operation  and  new  ones  built, 
with  the  per  cent,  increase,  is  as  follows : 

%  increase 
5.5 
7.3 
7.2 
9.9 
14.5 


Year                 Total  Ovens 

New  Ovens 

1914 

5,809 

321 

1915 

6,268 

459 

1916 

6,758 

488 

1917 

7,495 

739 

1918  (estimated) 

8,780 

1,275 

308        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Notwithstanding  this  increase,  fully  50  per  cent,  of  the 
metallurgical  coke  used  is  still  made  in  the  old-style  beehive 
ovens  at  a  total  loss  of  by-products.  The  reason  for  this  may 
be  found  in  a  long-standing  prejudice  in  favor  of  the  beehive 
coke  for  furnace  use.  It  is  a  good  coke,  no  question  about  that, 
but  it  has  been  repeatedly  demonstrated  that  the  by-products 
coke  is  just  as  good.  Large  iron  and  steel  companies  that  for- 
merly thought  they  could  not  get  along  without  beehive  coke 
are  now  either  using  by-products  coke  for  all  their  furnaces  or 
are  building  coke  ovens  with  that  end  in  view. 


Public  Should  Demand  Coke. 

So  much  for  those  who  use  coke  for  metallurgical  purposes ; 
they  will  soon  work  out  their  own  salvation  as  regards  fuel,  in 
that  all  furnaces  will  in  the  near  future  be  fired  with  by- 
products coke.  As  for  all  of  us,  collectively,  large  users  of  fuel 
for  domestic  heating,  we  do  not  in  general  have  the  advantage 
of  technical  advice  as  to  what  is  the  best  fuel  to  use — in  fact, 
we  are  at  times  victimized  by  sharpers  advocating  this  or  that 
fuel  economizer,  so  that  we  have  become  suspicious  of  any  new 
fuel.  It  is  now  decidedly  our  part,  however,  to  demand  coke 
for  domestic  heating,  thereby  securing  a  more  satisfactory  fuel 
for  ourselves  and  at  the  same  time  promoting  conservation  of 
the  country's  natural  resources.  The  enormous  waste  of  vola- 
tile constituents  of  bituminous  coal  today  is  nothing  short  of 
criminal. 


CONCILIATION  IN  THE  ANTHRACITE  REGION  309 


CONCILIATION  IN  THE  ANTHRACITE  REGION 

Address  by  EDWARD  W.  PARKER,  of  Philadelphia,  Pa.,  Before  The 
American  Mining  Congress. 

On  October  15,  1919,  John  L.  Lewis,  acting  president  of  the 
United  Mine  Workers  of  America,  issued  the  order  which  on 
the  first  day  of  this  month  stopped  the  production  of  bitu- 
minous coal  in  practically  all  of  the  organized  mining  districts, 
threw  in  the  neighborhood  of  400,000  men  out  of  employment 
and  threatened  disaster  to  the  transportation  and  manufactur- 
ing industries  of  the  country  with  possible  untold  distress  and 
suffering  to  that  portion  of  the  population  dependent  upon 
bituminous  coal  for  domestic  fuel. 

On  the  16th  day  of  October,  1902,  seventeen  years  before, 
lacking  one  day,  President  Roosevelt  telegraphed  to  the  late 
John  Mitchell,  then  president  of  the  United  Mine  Workers  of 
America,  that  he  had,  upon  the  suggestion  of  the  anthracite 
operators,  appointed  a  commission  to  which  should  be  referred 
all  the  questions  at  issue  between  the  companies  and  their  em- 
ployees and  asking  him  to  accept  on  behalf  of  the  mine  workers. 
A  convention  was  immediately  called,  the  proposition  of  Presi- 
dent Roosevelt  was  unanimously  adopted,  and  on  October  23 
President  Roosevelt  addressed  the  following  letter  to  the 
Anthracite  Coal  Strike  Commission : 

The  President's  Letter 

WHITE  HOUSE, 

Washington,  October  23,  1902. 
To  the  Anthracite  Coal  Strike  Commission: 

Gentlemen — At  the  request  both  of  the  operators  and  of  the 
miners,  I  have  appointed  you  a  Commission  to  inquire  into,  con- 
sider and  pass  upon  the  questions  in  controversy  in  connection 
with  the  strike  in  the  anthracite  region,  and  the  causes  out  of 
which  the  controversy  arose.  By  the  action  you  recommend, 
which  the  parties  in  interest  have  in  advance  consented  to  abide 
by,  you  will  endeavor  to  establish  the  relations  between  the 
employers  and  the  wage-workers  in  the  anthracite  field  on  a  just 
and  permanent  basis,  and,  as  far  as  possible,  to  do  away  with 


310         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

any  causes  for  the  recurrence  of  such  difficulties  as  those  which 
you  have  been  called  in  to  settle.  I  submit  to  you  herewith  the 
published  statement  of  the  operators,  following  which  I  named 
you  as  the  members  of  the  Commission. 

THEODORE  ROOSEVELT. 

By  this  action  of  President  Roosevelt,  one  of  the  most 
momentous  struggles  in  the  history  of  labor  controversies  was 
brought  to  a  close. 

It  is  not  the  purpose  of  the  present  paper  to  discuss  the 
merits  or  demerits  of  that  struggle,  nor  the  one  in  the  bitu- 
minous fields  precipitated  by  the  order  of  Acting  President 
Lewis  of  October  15  last,  but  to  call  attention  to  one  particular 
result  that  followed  the  appointment  of  the  Anthracite  Com- 
mission and  to  express  the  hope  that  some  similar  machinery 
may  be  set  in  motion  that  will  put  to  an  end,  or  at  least  mini- 
mize, labor  dissensions  not  only  in  the  bituminous  coal  fields 
but  in  other  lines  of  industry. 

It  will  be  noted  that  President  Roosevelt  directed  the  Com- 
mission not  only  to  pass  upon  the  questions  in  controversy,  but 
to  "endeavor  to  establish  the  relations  between  the  employers 
and  the  wage-workers  in  the  anthracite  fields  upon  a  just  and 
permanent  basis,  and,  as  far  as  possible,  to  do  away  with  any 
causes  for  the  recurrence  of  such  difficulties  as  those  you  have 
been  called  in  to  settle." 

Government  Declined  Request 

One  of  the  demands  of  the  mine  workers  in  the  anthracite 
strike  was  for  a  compulsory  order  that  an  agreement  should  be 
made  between  the  anthracite  companies  and  the  United  Mine 
Workers  of  America.  This  the  Commission  declined  to  do.  Its 
pronouncement  in  upholding  the  principle  of  the  open  shop  was 
couched  in  no  uncertain  language.  Its  decision  was  unanimous 
and  there  was  a  representative  of  organized  labor  in  its  mem- 
bership. On  this  subject  it  said: 

The  right  to  remain  at  work  where  others  have  ceased  to  work, 
or  to  engage  anew  in  work  which  others  have  abandoned,  is  part 
of  the  personal  liberty  of  a  citizen  that  can  never  be  surrendered, 
and  every  infringement  thereof  merits  and  should  receive  the 
stern  denouncement  of  the  law. 


CONCILIATION  IN  THE  ANTHRACITE  REGION  311 

And  again : 

The  right  thus  to  work  cannot  be  made  to  depend  upon  the 
approval  or  disapproval  of  the  personal  character  arid  conduct  of 
those  who  claim  to  exercise  this  right.  If  this  were  otherwise, 
then  those  who  remain  at  work  might,  if  they  were  in  the  ma- 
jority, have  both  the  right  and  power  to  prevent  others,  who 
choose  to  cease  to  work,  from  so  doing. 

This  all  seems  too  plain  for  argument.  Common  sense  and 
common  law  alike  denounce  the  conduct  of  those  who  interfere 
with  this  fundamental  right  of  the  citizen.  The  assertion  of  the 
right  seems  trite  and  commonplace,  but  that  land  is  blessed 
where  the  maxims  of  liberty  are  commonplaces. 

And  it  awarded : 

That  no  person  shall  be  refused  employment,  or  in  any  way 
discriminated  against,  on  account  of  membership  or  non-member- 
ship in  any  labor  organization;  and  that  there  shall  be  no  dis- 
crimination against,  or  interference  with,  any  employee  who  is 
not  a  member  of  any  labor  organization  by  members  of  such 
organization. 

But  while  the  Commission  declined  to  make  an  award  which 
would  compel  recognition  of  the  United  Mine  Workers  of 
America,  it  did  express  the  opinion  "that  some  satisfactory 
method  for  the  adjustment  of  grievances  which  may  arise  from 
time  to  time,  to  the  end  that  strikes  and  lock-outs  may  be  un- 
necessary, the  demand  for  which  as  part  of  an  agreement  with 
the  United  Mine  Workers  of  America  is  made  in  the  fourth 
claim,  just  referred  to,  should  be  imposed  by  its  award  upon 
the  parties  to  this  submission.  And  it  adjudged  and  awarded : 

That  any  difficulty  or  disagreement  arising  under  this  award, 
either  as  to  its  interpretation  or  application,  or  in  any  way  grow- 
ing out  of  the  relations  of  the  employers  and  employed,  which 
cannot  be  settled  or  adjusted  by  consultation  between  the  super- 
intendent or  manager  of  the  mine  or  mines,  and  the  miner  or 
miners  directly  interested,  or  is  of  a  scope  too  large  to  be  so 
settled  and  adjusted,  shall  be  referred  to  a  permanent  joint  com- 
mittee, to  be  called  a  board  of  conciliation,  to  consist  of  six  per- 
sons, appointed  as  hereinafter  provided.  That  is  to  say,  if  there 
shall  be  a  division  of  the  whole  region  into  three  districts,  in  each 
of  which  there  shall  exist  an  organization  representing  a  ma- 
jority of  the  mine  workers  of  such  district,  one  of  said  board  of 
conciliation  shall  be  appointed  by  each  of  said  organizations,  and 
three  other  persons  shall  be  appointed  by  the  operators,  the 
operators  in  each  of  said  districts  appointing  one  person. 


312          PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  Commission  directed  that  the  Board  of  Conciliation  as 
thus  constituted  should  take  up  and  consider  any  question 
referred  to  it,  and  that  any  decision  by  a  majority  of  the  Board 
should  be  binding  upon  both  parties,  and  that  any  questions 
upon  which  the  Board  was  equally  divided  should  be  submitted 
to  an  umpire  who  should  be  selected  by  one  of  the  circuit  judges 
of  the  Third  Judicial  Circuit  of  the  United  States,  and  the 
decision  of  the  umpire  should  be  final  and  binding  upon  all 
parties. 

Roosevelt  Settled  Strike 

This  award  of  the  Commission  was  its  most  important 
achievement.  The  settlement  of  the  strike  itself  was  the  act  of 
President  Roosevelt,  the  Commission  simply  acting  as  his  agent 
in  working  out  the  terms  of  settlement,  and  as  these  terms  were 
continued  practically  without  change  in  two  subsequent  agree- 
ments between  the  operators  and  the  miners,  each  of  these 
agreements  covering  a  period  of  three  years,  it  may  be  safely 
assumed  that  they  were  fairly  satisfactory  to  both  sides  to  the 
original  controversy.  And  in  the  subsequent  agreements  where 
changes  have  been  made  as  conditions  of  market  and  of  employ- 
ment have  warranted,  the  agreements  have  referred  and  have 
been  tied  to  the' awards  of  the  Anthracite  Coal  Strike  Com- 
mission. 

The  establishment  of  the  Board  of  Conciliation  was  the  act 
of  the  Commission  in  carrying  out  the  expressed  wish  of  Presi- 
dent Roosevelt  of  "establishing  the  relations  between  the  em- 
ployers and  the  wage-workers  *  *  *  on  a  just  and  per- 
manent basis,"  and  it  is  upon  the  work  of  this  Board  that  I 
desire  to  address  this  convention  and  through  it  the  bituminous 
mine  workers  and  the  public  at  the  present  time. 

Seventeen  Years  Peace 

In  the  first  place  let  me  say  that  in  the  17  years  from  Thurs- 
day morning,  October  23,  1902,  when  the  anthracite  miners 
returned  to  their  working  places,  to  the  present  time,  there  has 
been  no  general  strike  in  the  anthracite  region.  There  have, 
it  is  true,  been  some  "suspensions,"  notably  in  April,  1912,  and 
again  in  1916,  pending  the  renewal  of  the  agreements,  but  these 
were  of  a  peaceful  order  and  partook  more  of  the  nature  of 


CONCILIATION  IN  THE  ANTHRACITE  REGION  313 

vacations  than  of  strikes.  And  there  have  been  some  local 
disturbances  that  affected  individual  mines,  companies  or  dis- 
tricts, but  these  are  bound  to  occur  as  long  as  human  nature 
continues  as  it  is  today.  The  Board  of  Conciliation  makes  it 
a  hard  and  fast  rule,  however,  that  it  will  not  consider  any 
grievances  while  the  men  are  "out"  and  this  has  acted  as  a 
restraining  influence  in  general,  and  as  a  compelling  influence 
to  return  to  work  once  the  men  have  gone  on  strike. 

The  most  frequent  causes  of  trouble  have  been  what  are 
known  as  "button  strikes"  which,  while  contrary  to  the  award 
of  the  Commission  "that  there  shall  be  no  discrimination 
against,  or  interference  with,  any  employee  who  is  not  a  mem- 
ber of  any  labor  organization  by  members  of  such  organiza- 
tion," have  been  looked  upon  somewhat  leniently  as  disciplinary 
action  against  members  of  an  organization  not  in  good  stand- 
ing, rather  than  against  non-members  of  the  organization. 
Taking  it  altogether,  there  have  been  17  years  of  peace  and  of 
unprecedented  prosperity  among  the  mine  workers  of  the 
anthracite  region,  all  as  a  result  of  the  common-sense,  benefi- 
cent manner  in  which  the  Board  of  Conciliation  has  performed 
the  duties  imposed  upon  it. 

Anthracite  Conciliation 

The  success  that  has  attended  the  work  of  the  Anthracite 
Board  of  Conciliation  has  been  due  in  no  small  degree  to  the 
fact  that  it  has  been  free  from  the  taint  of  politics,  except  to 
the  extent  that  politics  inside  of  the  mine  workers'  organiza- 
tion may  have  influenced  the  selection  of  the  three  members  on 
the  Board  who  represent  the  miners,  as  the  presidents  of  the 
three  districts  in  the  region  have  represented  the  miners  and 
the  personnel  has  changed  as  the  result  of  the  elections  for 
officers  in  the  organization.  Only  four  men  have  represented 
the  operators  since  the  Board  was  organized.  The  original 
operators  members  were  Messrs.  W.  L.  Connell,  S.  D.  Warriner 
and  R.  C.  Luther.  Mr.  Luther  died  in  1905  and  was  succeeded 
by  Mr.  W.  J.  Richards,  who  has  continued  to  serve  with  the 
other  two  original  members  to  the  present  time. 

The  Anthracite  Board  of  Conciliation  sits  as  a  court,  but 
there  are  no  lawyers  present,  except  possibly  as  auditors,  and 
no  oaths  are  administered.  If  an  employee  has,  or  thinks  he 


314         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

has  a  grievance,  which  he  has  not  been  able  to  have  settled  by 
conference  with  the  mine  foreman  or  superintendent,  he  is 
privileged  to  bring  it  before  the  Board  of  Conciliation.  He 
tells  his  story  and  presents  such  corroborative  evidence  as  he 
may  desire  through  other  witnesses.  He  and  they  are,  of 
course,  subject  to  cross-examination  and,  although  not  under 
oath,  it  usually,  in  fact  almost  always,  develops  that  any 
attempt  to  misrepresent  facts  is  caught,  and  the  offender  gets 
no  sympathy  from  the  Board,  and  rarely  from  the  audience, 
which  generally  consists  largely  of  his  fellow- workers. 
Throughout  the  hearings  there  is  an  air  of  easy  and  orderly 
informality,  the  sole  idea  being  to  get  at  the  truth. 

In  the  17  years  of  its  existence  the  Board  of  Conciliation  has 
settled  more  than  600  cases,  comparatively  few  of  which  have 
had  to  be  referred  to  the  umpire  provided  for  in  the  award  of 
the  Anthracite  Commission.  In  addition  to  the  cases  settled 
by  the  Board  sitting  as  a  court  many  disputes  have  been  peace- 
fully arranged  through  the  good  offices  of  the  members  of  the 
Board  in  their  respective  districts,  without  bringing  them  into 
"court." 

New  Order  Established 

The  establishment  of  the  Board  of  Conciliation  has  created 
a  new  order  of  things  in  the  anthracite  region.  It  has  made 
itself  a  common  sense  court  of  "oyer  and  terminer"  and  its 
quasi-legal  system  of  doing  even-handed  justice  has  spread 
among  the  mine  workers  a  sense  of  security  and  has  created 
and  maintained  a  more  friendly  feeling  between  employer  and 
employee  than  probably  exists  in  any  other  large  industry.  It 
has  been  designated  by  one  writer  recently  as  the  most  suc- 
cessful industrial  court  in  the  world.  But  for  the  existence  of 
the  Anthracite  Board  of  Conciliation  it  is  doubtful  if  there 
would  have  been  quietly  held  in  Philadelphia  on  September  26 
a  meeting  of  operators  and  miners  at  which  the  wage  scale 
agreed  upon  on  November  15,  1918,  was  extended  until  March 
31,  1920,  when  it  was  practically  known  what  demands  the 
bituminous  miners  were  going  to  make  and  that  a  strike  in  the 
bituminous  mines  on  November  1  was  inevitable. 

The  meetings  of  the  Anthracite  Board  of  Conciliation  are 
always  interesting  from  a  psychological  point  of  view  and 


CONCILIATION  IN  THE  ANTHRACITE  REGION  315 

frequently  they  develop  incidents  bordering  closely  on  the 
dramatic.  Occasions  have  occurred  when  attempts  have  been 
made  to  "put  something  over"  on  the  board.  The  speaker  was 
present  at  one  session  where  such  a  thing  occurred.  It  was 
spotted,  as  such  attempts  generally  are,  and  the  "dressing 
down"  that  the  young  man  received  from  one  of  the  members 
of  the  board  was  a  piece  of  excoriation  worthy  of  a  judge  ex- 
pressing his  opinion  of  some  particularly  flagrant  disrespect  of 
the  court.  That  young  man  probably  never  repeated  the 
offense.  Incidents  of  this  kind  are  rare,  however.  The  sessions 
are  usually  conducted  in  an  atmosphere  of,  as  the  name  implies, 
conciliation.  They  are  extremely  democratic.  The  six  mem- 
bers of  the  board  sit  at  a  long  table  on  the  floor  level  and  the 
witnesses  sit  at  the  other  side  facing  them.  Not  infrequently, 
in  probably  more  than  half  the  cases  in  fact,  the  complainant 
is  a  foreigner  and  has  difficulty  in  presenting  his  case  in  the 
English  language.  In  such  cases  he  is  helped  to  tell  his  story 
even  by  the  members  of  the  board  that  might  be  supposed  to  be 
"on  the  other  side."  The  policy  of  getting  at  the  facts  is  the 
governing  incentive.  Sometimes  the  evidence  partakes  of  a 
somewhat  technical  character,  and  mine  maps  and  drawings 
are  introduced  as  evidence.  Comedy  also  plays  its  part  at 
times,  but  not  to  such  an  extent  as  to  interfere  with  the  orderly 
proceeding  of  the  inquiry.  The  Board  of  Conciliation,  without 
intending  possibly  to  do  so,  carries  out  the  Biblical  injunction, 
"Come,  let  us  reason  together,"  and  by  its  17  years  of  useful- 
ness has  provided  a  time-tested  method  of  procedure  and  of 
efficiency  in  handling  labor  disputes  that  may  well  be  taken  as 
an  example  for  every  line  of  industry.  Causes,  which  today 
are  heard,  discussed  and  settled  in  round-the-table  conferences, 
would  have  precipitated  strikes  and  probably  resulted  in  dis- 
order and  bloodshed  a  score  of  years  ago. 


The  Bituminous  Strike 

Since  the  first  of  November  the  bituminous  coal  mining  in- 
dustry has  been  going  through  the  throes  suffered  by  its  sister 
industry  in  1902,  but  with  no  such  reason.  "Thrice  armed  is 
he  that  hath  his  quarrel  just."  There  was  some  justice  in  the 
demands  of  the  anthracite  miners  in  1902.  They  had  the  sym- 
pathies of  the  press,  the  public  and  the  politicians,  the  "Three 


316          PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

P.'s"  and  they  won  what  they  deserved  to  win,  though  not  all 
that  they  demanded.  Their  crowning  victory,  shared  by  the 
operators,  was  the  creation  of  the  Anthracite  Board  of  Con- 
ciliation, which  has  maintained  peace  and  prosperity,  the  other 
two  great  "P.'s"  in  the  anthracite  region.  It  cannot  be  said 
that  the  bituminous  mine  workers,  or  the  men  that  have  led 
them  have  had  their  quarrel  just — nor  have  they  had  the  sym- 
pathy of  the  first  three  "P's"  and  they  will  lose  as  they  deserve 
to  lose.  But  it  may  not  be  hoped  that  out  of  this  struggle, 
brought  to  an  end  as  was  the  anthracite  strike,  by  Federal 
interposition  (very  differently  applied,  however),  there  may 
arise  a  board  or  some  boards  of  conciliation,  free  from  State 
or  Federal  politics,  that  will  do  for  the  bituminous  coal  mining 
industry  what  the  Anthracite  Board  of  Conciliation  has  done 
for  the  anthracite  region,  "establish  the  relations  between 
employers  and  wage-workers  upon  a  just  and  permanent  basis, 
and,  as  far  as  possible,  do  away  with  any  causes  for  the  recur- 
rence of  such  difficulties  as  those  which"  have  so  nearly 
brought  disaster,  not  only  to  it,  but  to  the  country  as  a  whole — 
in  fact,  establish  and  maintain  peace  and  prosperity  in  the 
bituminous  coal  mining  regions. 


OUR  INDUSTRY'S  PART  317 


OUR  INDUSTRY'S  PART 

Address  by  GEORGE  OTIS  SMITH,  Director  U.  S.  Geological  Survey, 
Before  The  American  Mining  Congress,  St.  Louis 

The  realization  of  America's  large  heritage  in  the  form  of 
natural  resources  prompts  us  to  regard  ourselves  as  divinely 
elected  to  world  leadership.  And  indeed  no  people  can  more 
truly  or  more  profitably  repeat  for  their  own  benefit  the  words 
of  Milton : 

"Accuse  not  Nature!     She  hath  done  her  part; 
Do  thou  but  thine." 

The  rank  of  the  United  States  in  the  world's  mineral  indus- 
try is  shown  by  the  fact  that  in  the  last  normal  year,  1913,  our 
output  of  the  principal  mineral  commodities  constituted  about 
36  per  cent,  of  the  world's  production,  or  as  much  as  the  six 
leading  nations  of  Europe  together.  Here  is  where  figures  are 
more  eloquent  than  adjectives  in  expressing  America's  indus- 
trial leadership.  Yet  such  endowment  of  national  wealth 
brings  its  responsibilities,  and  the  obligation  laid  upon  our  in- 
dustry is  measured  in  a  way  by  the  very  abundance  of  the 
treasure  in  this  greatest  storehouse  of  mineral  fuels  and  ores 
of  the  useful  metals. 

Platitudes  about  our  duty  to  the  nation  do  not  meet  the 
present  need.  The  test  of  the  individual  or  the  industry  is  the 
contribution  made  to  the  general  welfare.  We  correctly  de- 
scribe our  industry  as  a  producer  of  basic  wealth,  but  in  the 
policy  of  the  mining  industry  the  dominating  note  should  be 
not  "wealth"  but  "welfare."  In  promoting  the  general  well- 
being  our  industry  is  called  upon  to  play  no  small  part.  I  am 
going  to  suggest  that  we  consider  the  nature  of  our  contribu- 
tion to  the  nation ;  our  particular  problems  in  industrial  part- 
nership ;  the  duty  of  our  industry  to  other  business ;  and  the 
relation  between  the  mining  industry  and  the  Government. 

During  the  war  period,  in  addressing  a  group  of  my  farmer 
friends  in  Maine,  I  told  them  that  the  world  doesn't  owe  the 
farmer  a  living,  but,  on  the  contrary,  the  farmer  owes  the 
world  a  living.  I  believe  that  proposition  continues  to  express 


318         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  truth  under  peace  conditions,  and  I  would  now  add  my 
economic  and  social  conviction  that  the  other  great  productive 
industry  which  we  men  represent  here  also  owes  the  world  a 
living.  Our  duty  is  to  provide  an  adequate  supply  of  the  raw 
materials  from  which  can  be  fashioned  the  almost  infinite 
variety  of  manufactured  commodities  that  the  modern  world 
requires.  The  part,  then,  of  our  industry  in  the  cosmic  scheme 
of  things  is  to  furnish  the  world  with  fuel,  with  metals  and 
with  all  the  other  mineral  raw  materials  which  civilization 
takes  as  a  matter  of  course  but  without  which  civilization  can- 
not survive. 

No  'Dollar  Mark"  Standard 

The  exact  measure  of  our  contribution  to  the  world,  however, 
is  not  the  dollar.  Some  of  us  with  a  statistical  bent  love  to 
note  the  fact  that  the  value  of  our  country's  annual  mineral 
production  passed  the  billion  dollar  mark  in  1899,  reached  the 
two  billion  mark  in  1907,  exceeded  three  billion  dollars  in  1916 
and  attained  five  billions  in  1917,  and  five  and  a  half  billions 
last  year.  Yet  the  total  value  of  our  annual  output  is  a  starting 
point  for  economic  self-examination  rather  than  a  goal  reached 
that  justifies  self-glorification.  The  dollar  is  a  handy  measur- 
ing stick,  but  the  results  it  gives  need  to  be  verified ;  quantity 
and  quality  of  commodities  give  the  truer  measure  of  their  use- 
fulness. As  a  newspaper  editor  recently  put  it :  "We  don't  eat 
dollar  marks — we  consume  production." 

The  reported  value  at  the  mine  mouth  of  our  coal  output  may 
be  significant  of  wages  and  possible  profits  to  the  mine  workers 
and  mine  owners,  but  it  does  not  measure  the  heat  units  made 
available  for  the  world's  work  and  comfort.  So,  if  we  look 
behind  the  camouflage  of  increased  prices,  we  see  that  the 
jump  of  nearly  a  billion  and  a  half  dollars  in  1917  did  not  mean 
that  our  mines  contributed  an  additional  42  per  cent,  to  the 
world's  needs.  As  a  matter  of  fact,  of  such  essential  metals  as 
copper,  iron  and  lead  as  well  as  gold  and  silver,  there  was  a 
decreased  output,  a  loss  to  the  world,  aggregating  more  than 
half  a  million  tons.  Again,  last  year  the  half  billion  dollar 
increase  in  market  value  expressed  not  an  increase  but  a  de- 
crease in  tonnage  of  such  leading  items  as  iron,  lead,  zinc,  gold 
and  silver.  In  short,  the  number  of  loaded  freight  cars  that 


OUR  INDUSTRY'S  PART  319 

daily  leave  your  plant  gives  a  good  measure  of  your  usefulness 
to  the  world,  irrespective  of  the  size  of  your  daily  bank  deposit. 

Improved  Mining  Conditions 

The  most  gratifying  part  of  the  record  of  American  mining 
and  metallurgy  is  found  in  the  increasing  annual  output  of  coal 
or  iron  per  miner,  the  steady  improvement  in  recovery  of 
values  from  refractory  ores,  the  continued  lowering  in  the 
.grade  of  copper  ore  that  can  be  handled  at  a  profit,  and  the 
increased  safety  to  life  and  health  of  the  workers.  All  this  is 
the  result  of  engineering  in  the  service  of  man,  and  in  a  ma- 
terial way  all  this  tends  to  increase  the  tonnage  of  your  output 
without  increase  in  price  and  probably  even  with  lowered  costs. 

So  it  is  that,  rather  than  take  the  grand  totals  for  our  coal 
and  oil  and  metal  expressed  in  dollars  as  the  true  index  of  our 
prosperity,  we  can  better  claim  credit  for  our  industry  when 
prices  are  low  and  yet  our  mines  are  running  full  time  and  our 
furnaces  full  blast. 

The  fact  of  partnership  in  industry  is  now  generally  recog- 
nized and  we  need  discuss  only  the  ways  and  means  for  putting 
into  effect  this  principle  of  community  of  interest.  Prosperity 
in  any  business  cannot  be  one-sided;  the  public,  labor  and 
capital — all  three — must  share  its  benefits.  So,  too,  an  idle 
industry  assesses  its  losses  upon  each  of  these  three  partners. 
The  coal  industry  furnishes  abundant  illustration  of  this 
truth;  the  curve  of  weekly  coal  production  tells  the  story  of 
highly  irregular  operation,  and  idle  plants  and  idle  men  are 
expensive  taxes  upon  the  community  and  the  nation. 

Coal  Mining  Situation 

The  advantages  of  regular  employment  accrue  alike  to  labor 
and  capital ;  it  is  the  year's  earnings  that  really  count,  whether 
it  is  the  dollar  or  the  man  whose  service  we  thus  measure. 
Now,  if  we  study  the  country's  soft-coal  business  as  a  whole, 
we  find  a  gratifying  improvement  during  the  war  period  in  the 
average  number  of  days  of  employment — from  195  days  in 
1914  to  the  top  record  of  249  days  last  year.  But  these  aver- 
ages for  the  country  unfortunately  include  low  figures  for  cer- 
tain States,  and  usually  for  the  same  States  year  after  year,  a 
relation  that  deserves  this  comment:  wherever  the  working 


320         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

year  is  shortest  there  dissatisfaction  with  the  conditions  of 
labor  is  keenest — in  other  words,  where  the  coal  mines  have 
not  enough  market  to  keep  them  running  a  long  working  year, 
there  we  find  labor  unrest.  For  example,  the  average  working 
days  per  year  for  Ohio,  Indiana  and  Illinois  for  the  last  five 
years  have  been  176,  196  and  206,  respectively,  as  contrasted 
with  average  of  252  days  for  Alabama,  258  for  Virginia  and 
292  for  New  Mexico.  Of  course  the  relationship  is  not  simple ; 
cause  and  effect  are  mixed  in  this  coincidence  of  short  years, 
labor  unrest  and  union  strength,  and  it  must  be  noted  that 
mine  owners  as  well  as  mine  workers  suffer  from  every  inter- 
ruption to  the  full  opportunity  for  earning  that  comes  only 
with  continuous  operation.  The  underlying  cause  of  bad  con- 
ditions in  the  coal  industry  is  the  seasonal  fluctuation  in  de- 
mand, which  has  resulted  in  the  country  being  over-equipped 
with  coal  mines  and  coal  miners.  The  three  States  mentioned 
as  favored  with  longer  working  years  owe  this  advantage  to  a 
market,  largely  metallurgical  and  railroad,  to  the  demands  of 
which  the  mines  are  fairly  well  adjusted. 

Public  Co-Operation  Needed 

For  three  months  this  last  spring  the  coal  mines  of  the 
country  were  operated,  on  an  average,  for  only  about  24  hours 
a  week.  From  coast  to  coast  the  reason  for  lost  time  was  "no 
market,"  something  beyond  the  control  of  either  operator  or 
mine  worker.  Here,  then,  is  the  greatest  branch  of  our  mining 
industry  vitally  affected  by  a  widespread  malady,  the  remedy 
for  which  lies  with  the  public  alone.  Arbitration,  dictation, 
legislation  cannot  cure  such  deep-seated  trouble.  Laws  cannot 
make  coal  mines  operate  when  there  is  no  outlet  for  their 
product,  but  education  of  the  consuming  public  may  accomplish 
much  in  bettering  the  conditions  of  demand,  and  we  as  con- 
sumers will  do  well  to  remember  that  the  price  we  pay  for  coal 
must  in  the  long  run  be  enough  to  pay  for  the  idle  days  of  both 
mines  and  miners  as  well  as  for  the  days  they  work.  The 
public  interest  lies  in  a  longer  working  year,  not  in  a  shorter 
day  or  week.  Largely  on  account  of  the  irregular  market  de- 
mand for  coal,  our  mines  since  the  armistice  have  actually 
averaged  only  30  hours  working  time  a  week;  throughout  the 
year  there  have  been  too  many  mines  and  too  many  miners 


OUR  INDUSTRY'S  PART  321 

waiting  for  work.  A  thirty-hour  week  is  the  ailment — not  the 
cure 

Reference  to  this  fact  of  industrial  partnership  is  not  com- 
plete without  mention  of  the  third  partner — the  public. 
Whether  we  belong  to  the  mine-worker  or  to  the  mine-owner 
division  of  the  mining  industry  our  duty  is  the  same ;  we  must 
promote  the  general  welfare.  A  recent  editorial  in  the  Satur- 
day Evening  Post  pointed  out  that  the  doctors  and  the  nurses 
have  the  right  kind  of  class  consciousness — they  are  conscious 
that  their  duty  to  the  whole  people  takes  precedence  over  their 
selfish  interests. 

A  true  diagnosis  of  the  financial  condition  of  our  industry 
involves  bookkeeping  that  states  the  real  economic  symptoms. 
In  mining  as  in  all  other  productive  business,  production  costs 
should  express  all  the  facts,  but  I  am  convinced  that  we  have 
not  yet  reached  that  stage  in  our  accounting  methods.  The 
annual  reports  of  our  largest  mining  corporations  and  the 
studies  by  the  Federal  Trade  Commission  alike  fail  to  tell  the 
whole  story  in  their  statement  of  production  costs,  which  are 
made  to  include  the  wages  of  labor  but  not  the  wages  of  capital 
employed.  The  Federal  Trade  Commission  in  its  definition  of 
cost  specifically  excludes  interest  on  investment,  but  can  we  do 
that  in  the  world  of  realities  ?  Does  not  the  cost  of  a  pound  of 
copper  just  as  truly  include  its  share  of  the  interest  due  on  the 
bonds  and  the  dividend  due  on  the  capital  stock  actually  paid 
in — that  is,  wages  paid  to  capital — as  it  includes  the  wages 
paid  to  the  mine  worker  or  the  man  in  the  smelter?  Of  course 
neither  payroll  should  be  padded.  Do  not  regard  the  definition 
of  profit  as  simply  an  academic  question  for  college  professors 
to  discuss — it  is  more  a  matter  of  fundamental  concern  to  the 
men  who  are  trying  to  build  up  the  industry. 

An  Unfair  Situation 

In  the  first  place,  such  terms  as  "net  earnings,"  "profit," 
"net  income,"  "surplus,"  or  "balance  to  surplus  account," 
which  appear  on  your  financial  sheets,  are  too  optimistic  in 
tone  when  the  operating  costs  do  not  include  any  charge  on 
account  of  the  investment.  The  inference  is  too  easily  drawn 
that  this  surplus  is  available  for  profit-sharing  between  labor 
and  capital.  For  example,  the  Federal  Trade  Commission  re- 


322         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

port  on  copper  is  quoted  in  newspaper  headlines  as  showing 
"28  per  cent,  profit  in  copper,"  yet  in  this  report  the  wage  to 
labor  is  set  forth  as  the  first  and  largest  item  among  the  ele- 
ments of  cost,  this  item  alone  averaging  5%  cents  a  pound  in 
1918,  but  cost  of  capital  is  not  included.  The  report,  however, 
shows  that  the  85  copper  companies  discussed  would  require 
an  average  of  3  cents  a  pound  to  pay  10  per  cent,  on  their 
actual  investment,  yet  this  3  cents  does  not  appear  in  the  16 
cents  of  average  cost,  but  instead  it  forms  a  part  of  the  8  cents 
of  the  so-called  "net  profit,"  which  the  unwary  may  regard  as 
the  actual  difference  between  price  and  cost. 

In  the  second  place,  I  fear  lest  accounting  which  does  not 
count  all  the  costs  may  lead  us  to  fail  to  appreciate  the  results 
of  American  engineering.  Our  mining  engineers,  backed  up 
by  red-blooded  capitalists,  are  constantly  lowering  labor  costs 
by  increasing  the  investment  in  improved  mine  equipment. 
This  means  replacing  the  hardest  part  of  labor  with  ma- 
chinery— working  dollars  instead  of  men — so  that  your  cost- 
keeping  conceals  the  true  state  of  things,  if  you  pay  labor  out 
of  so-called  "costs"  and  capital  out  of  so-called  "profits."  By 
your  improvement  in  equipment  you  are  subtracting  from  one 
side  of  the  account  and  adding  to  the  other,  thus  ever  making 
the  margin  apparently  larger  than  it  really  is.  The  great 
strides  in  advancing  our  mining  industry  have  come  through 
large  investments  in  plant,  and  we  must  in  fairness  include  a 
living  wage  for  capital  as  well  as  for  labor  when  we  figure  the 
cost  of  winning  this  or  that  metal  from  the  low-grade  ores, 
metal  which  a  few  years  ago  not  all  the  labor  in  the  world 
could  have  won  for  the  use  of  mankind. 

Must  Play  Fair 

I  have  elsewhere  suggested  that  industry  must  have  a  con- 
science, irrespective  of  the  old  charge  that  corporations  have 
no  souls.  Our  mining  industry  cannot  stand  right  in  the  eyes 
of  the  modern  world,  unless  it  plays  fair  with  the  rest  of  the 
business  organization.  We  must  try  to  see  the  other  side  of  the 
shield,  whatever  the  transaction  with  our  fellow-men,  and  I 
can  best  illustrate  the  application  of  the  Golden  Rule  in  eco- 
nomics by  citing  our  relation  to  the  railroads. 


OUR  INDUSTRY'S  PART  323 

As  the  railroad's  largest  customer,  the  mining  industry  is 
largely  concerned  in  the  solution  of  the  transportation  problem 
now  so  prominently  before  the  American  public.  It  is  plain 
that  adequate  service  and  low  rates  mean  much  to  the  health 
if  not  to  the  very  life  of  our  industry,  yet  even  as  large  buyers 
of  transportation  we  should  not  seek  preferential  rates  at  the 
expense  of  the  rest  of  the  public,  any  more  than  as  sellers  of 
fuel  and  metal  we  should  be  willing  to  let  the  Railroad  Admin- 
istration procure  its  supplies  from  our  mines  and  furnaces  and 
mills  at  prices  so  related  to  bare  cost  that  the  public  must  make 
up  the  difference.  You  coal  operators  know  too  well  how  that 
style  of  shoe  pinches  to  wish  the  same  kind  of  narrow  policy  on 
the  reorganized  railroad  system.  We  must  allow  freight  rates 
to  be  determined  by  facts  of  transportation  cost,  rather  than 
by  what  we  claim  to  be  the  exigencies  of  our  own  business. 
Even  a  legislature  cannot  impose  rates,  however  they  may  seem 
calculated  to  serve  public  interest,  that  would  deny  to  the  rail- 
road the  reasonable  reward  necessary  for  its  financial  and 
physical  upkeep.  The  Supreme  Court  has  ruled  that  a  State 
law  cannot  force  a  railroad  to  haul  coal  at  a  loss  on  the  suppo- 
sition that  the  profits  in  the  wheat  traffic  will  recoup  the  car- 
rier. So  it  is  that  in  a  spirit  of  fairness  the  mining  industry 
ought  to  help  in  the  adjustment  of  rates  on  a  basis  adequate  to 
revive  healthy  conditions  on  our  railroads. 

Some  reference  to  the  relation  between  the  mining  industry 
and  the  Government  may  well  follow  my  remarks  on  business 
conscience.  Standing  as  I  do  a  little  closer  to  the  Government 
side,  I  prefer  to  emphasize  the  duty  of  the  Government  to  the 
industry.  I  believe  in  a  strong  Government,  strong  enough  to 
regulate  and  even  control  in  the  public  interest  every  industry  > 
but,  above  all,  I  believe  in  a  just  Government.  Back  in  Wash- 
ington we  have  a  body  of  public  servants  whose  desire  is  to 
serve  the  whole  people,  but  most  of  us  are  human,  and  newly 
acquired  power  may  sometimes  affect  our  vision,  so  that  we 
make  the  wrong  moves. 

In  its  relation  to  the  mining  industry  the  Government  needs 
to  be  fair,  whether  the  relation  is  that  of  mineral  landlord  or  of 
business  investigator  or  of  tax  collector  or  of  purchaser  of  fuel 
and  metals.  Disregard  of  established  equities,  ill-advised 
charges  of  bad  faith,  threats  of  commandeering,  or  offers  of 


324         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

confiscatory  terms  are  no  longer  warranted  in  these  days  when 
the  Government's  necessities  are  no  greater  than  those  of  other 
consumers.  Indeed,  the  principle  laid  down  by  President 
Wilson  during  the  war  that  the  Government  rate  should  be  the 
same  as  the  rate  to  the  public  should  have  been  followed  by 
every  one  down  the  line,  whatever  his  title  or  insignia  of  office. 
Now  that  we  have  had  time  to  regain  our  poise,  I  think  the 
public  servant  generally  wishes  to  serve  rather  than  to  com- 
mandeer. 

Government  Must  Be  Just 

We  in  the  Government  service,  however,  must  realize  the 
necessity  of  being  even  more  scrupulous  in  our  exercise  of 
power  than  if  we  were  in  private  business.  I  like  to  keep  in 
mind  the  words  of  Judge  Severns  in  the  Federal  Circuit  Court 
of  Appeals : 

It  derogates  from  the  dignity  and  character  of  the  Govern- 
ment to  suppose  that,  formed  as  it  is  to  secure  impartial  justice 
between  individuals,  it  may,  nevertheless,  in  the  conduct  of  its 
own  affairs,  without  regard  to  the  principles  it  represents,  per- 
petrate upon  its  citizens  wrongs  which  it  would  promptly  con- 
demn if  practiced  by  one  of  them  upon  another. 

In  my  opening  words  I  suggested  that  welfare  rather  than 
wealth  be  the  dominating  note  of  our  industry.  But  wealth 
may  be  defined  as  provision  for  future  welfare,  inasmuch  as  it 
is  the  surplus  beyond  present  needs.  To  the  present-day 
problem  of  industrial  unrest,  then,  what  is  the  answer,  except 
to  create  a  larger  surplus?  As  I  analyze  the  economic  situa- 
tion, surplus  of  production  over  consumption  can  come  through 
decreased  consumption  or  increased  production  or  both,  but  it 
cannot  come  through  restricted  production  or  increased  con- 
sumption or  both,  and  the  shortened  day  of  labor  surely  means 
both  less  produced  and  more  consumed.  Whether  among  indi- 
viduals or  among  nations,  the  old-fashioned  ideas  of  industry 
and  thrift  come  nearer  the  natural  law  than  the  new  proposi- 
tion of  a  five-day  week  and  a  six-hour  day.  No  protective  tariff 
can  safeguard  the  home  market  for  industries  based  on  a 
thirty-hour  week,  nor  can  our  industries  expect  to  win  or  hold 
a  place  in  foreign  markets  on  any  part-time  program,  unless 


OUR  INDUSTRY'S  PART  325 

there  is  some  international  agreement  making  for  universal 
indolence,  and  even  then  we  may  discover  that  there  can  be  no 
return  to  Garden  of  Eden  conditions  of  consumption  without 
productive  industry.  I  believe  the  earliest  precedent  was  a 
continuing  injunction  for  a  six-day  week,  and  no  lower  court 
has  since  ordered  any  better  rule  of  action  or  reversed  that 
Divine  injunction. 


326         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


STANDARDIZATION  OF  MINING  EQUIPMENT 

Report  of   Committee  Read  by  CHAIRMAN  WARREN   R.  ROBERTS 
to  the  American  Mining  Congress,  St.  Louis,  November  20,  1919 

The  Committee  on  Standardization  of  Mining  Equipment 
selected  by  the  American  Mining  Congress  previous  to  the 
Twenty-second  Annual  Convention  of  this  organization,  spent 
several  days  in  deliberation  in  St.  Louis,  November  15,  16,  17 
and  18  and  presented  a  report  valuable  alike  to  operators  and 
manufacturers.  The  report,  together  with  the  reports  of  sub- 
committees, is  given  herewith. 

Discussion  of  Report 

Colonel  Warren  R.  Roberts,  acting  chairman  of  the  General 
Committee,  in  presenting  the  report,  said :  "I  wish  to  make  a 
few  preparatory  remarks  before  I  present  the  official  report  for 
this  Committee  on  Standardization  of  Mining  Equipment, 
together  with  the  reports  of  the  various  sub-committees,  and 
with  recommendations  to  the  American  Mining  Congress  for 
the  continuation  of  this  work  of  standardization  of  mining 
equipment. 

"First,  I  wish  to  advise  you  that  this  work  was  only  recently 
begun,  that  is,  the  American  Mining  Congress  took  up  this 
work  quite  recently  by  appointing  a  General  Committee  to 
undertake  the  standardization  of  mining  equipment.  When  the 
letters  were  first  sent  out  to  the  various  engineers  and  manu- 
facturers, suggesting  the  possibility  of  standardization,  most 
of  those  approached  were  very  skeptical  as  to  the  possibility  of 
any  beneficial  results  from  the  undertaking,  therefore,  it  made 
the  start  rather  slow.  But  when  a  meeting  was  held  by  this 
General  Committee,  and  thought  given  as  to  the  subject,  all 
present  became  convinced  that  there  was  a  field  of  usefulness 
for  the  Congress  along  this  line  of  endeavor. 

"I  wish  to  advise  you  that  the  standardization  of  equipment 
and  machinery  of  all  kinds  in  this  country  is  really  just  begin- 
ning, in  all  but  a  few  of  the  more  technical  industries.  It  may 
seem  strange  to  you  that  the  most  technical  industries,  manu- 


STANDARDIZATION  OF  MINING  EQUIPMENT  327 

f  acturing  the  most  complicated  equipment,  are  those  who  have 
gone  the  farthest  in  standardization.  This  is  accounted  for,  no 
doubt,  by  the  fact  that  the  necessity  of  the  case  requires  that 
men  of  high  ability  were  secured  to  promote  such  industries, 
and  those  far-seeing  men  appreciate  the  results  that  would  be 
obtained  from  standardization  of  their  product.  The  result  is 
that  in  the  electrical  equipment  used  in  this  country  and  some 
other  of  the  more  intricate  machinery,  we  have  a  higher  degree 
of  standardization  than  any  other  industries. 

"Standardization  was  taken  up  by  the  United  States  Govern- 
ment during  the  war  as  a  means  of  promoting  production,  and 
it  was  learned  that  with  reasonable  standardization — that  is, 
carried  on  in  careful  consultation  with  the  manufacturers — 
that  we  very  greatly  accelerated  the  production,  in  all  the  com- 
modities which  we  attempted  to  standardize,  before  the  war 
was  over.  This  included  seventy-five  of  the  largest  commodi- 
ties used  in  the  army.  I  am  mentioning  this  only  to  show  the 
possibility  of  the  work  the  Congress  has  undertaken  through 
these  committees. 

"Those  of  us  who  have  had  experience  in  the  work  of  stand- 
ardization, counseled  those  on  the  committees  to  proceed  with 
a  great  deal  of  conservatism ;  to  take  up  the  more  general  things 
first,  those  things  which  would  be  more  readily  accepted  by  the 
operators,  and  which  it  would  be  easier  to  convince  the  opera- 
tors would  be  of  benefit  to  them.  The  ultimate  benefit  from 
standardization  comes  to  the  purchaser ;  there  are  very  material 
benefits  to  the  seller,  but  the  great  benefits,  of  course,  accrue 
to  the  buyer. 

"The  Congress  first  established  a  general  committee,  selected 
carefully  to  represent  the  various  interests  of  the  industry, 
including  coal  operators,  manufacturers  of  coal  mining  equip- 
ment, mining  engineers  and  contractors  of  mining  plants.  This 
General  Committee  represents  all  branches  of  the  industry. 
The  work  of  organizing  sub-committees  has  not  been  completed, 
although  a  number  of  sub-committees  have  been  organized  as 
you  will  see  by  their  reports. 

"On  behalf  of  the  Chairman,  who  is  absent,  I  move  the  adop- 
tion of  the  report  and  the  continuation  of  the  work  of  the 
committee." 

The  motion  was  seconded. 


328         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Standards  Committee 

Mr.  A.  Cressy  Morrison,  of  New  York,  said :  "There  is  a 
distinct  recommendation  in  this  report  that  I  would  like  to 
speak  of,  and  that  is  the  recommendation  that  the  American 
Mining  Congress  join  the  American  Engineering  Standards 
Committee.  The  American  Engineering  Standards  Committee 
holds  its  annual  meeting  the  twenty-second  of  this  month, 
Friday  of  this  week,  and  at  that  meeting  they  will  give  con- 
sideration to  application  of  new  members.  The  reason  for  the 
action  on  the  twenty-second,  and  that  particular  consideration, 
is  the  broadening  and  democratizing  influence  which  has  been 
brought  on  the  American  engineering  standards,  by  which  they 
have  decided  on  terms  to  admit  national  bodies. 

"The  Bureau  of  Standards  has  called  a  meeting  on  safety 
standards  particularly,  at  which  meeting  there  will  be  given 
consideration  to  all  sorts  of  standards,  and  especially  the  for- 
mation in  the  broadest  possible  way  of  the  American  Standards 
Committee.  The  American  Standards  Committee  has  adopted 
a  constitution  and  by-laws  which  leaves  in  the  hands  of  sponsor 
bodies  like  this  great  organization,  the  right  to  initiate  and 
formulate  standards. 

"The  necessity  for  this  sponsor  body  idea  is  very  clearly 
manifested  in  the  report  of  this  committee,  because  there  is  no 
body  that  can  formulate  standards  for  mining  operation  except 
the  miners  themselves,  men  who  are  operating  the  mines,  the 
superintendents,  all  those  men  who  can  tell  the  real  difficulties 
and  the  practical  operation.  Standards  to  be  effective  in  this 
country  or  any  country  must  be  in  direct  harmony  with  prac- 
tice; theory  is  good,  but  practice  is  better. 

"At  the  meeting  which  will  be  held  in  Washington,  D.  C., 
probably  the  ninth  of  December,  not  only  the  organizations 
which  were  there  on  January  16,  but  all  other  organizations 
which  have  been  included  in  the  extended  invitation  will  be 
given  the  opportunity  to  join  in  the  great  general  movement 
for  standardization  in  this  country. 

"The  English  Standards  Committee  has  been  in  operation 
for  seventeen  years,  in  more  active  operation  for  fourteen  of 
those  years,  and  during  the  last  few  years  has  accomplished  a 
great  work.  It  has  connected  itself  with  Government  regula- 
tions and  rules,  and  has  earned  the  respect  and  esteem  not  only 


STANDARDIZATION  OF  MINING  EQUIPMENT  329 

of  the  Government,  but  the  industries  who  co-operated.  We 
have  never  had  such  an  organization  as  that. 

'The  tendency  in  this  country  to  State  regulations  and  State 
standards  has  been  so  strong  that  there  has  never  crystallized 
a  movement  for  national  standards.  The  result  is  that  we  are 
subjected  in  law  and  practice  to  a  multitude  of  standards. 

"I,  therefore,  recommend  that  serious  consideration  be  given 
at  this  time  to  the  suggestion  of  the  committee  that  this  great 
body  immediately  signify  its  intention  of  attaching  itself  to  the 
American  Engineering  Standards  Committee.  It  will  give 
great  help  to  that  committee  in  its  efforts  in  Washington,  D.  C., 
to  centralize  and  crystallize  a  movement. 

"If  it  could  be  done,  I  respectfully  suggest  that  the  Secretary 
be  instructed  to  telegraph  to  the  Engineering  Standards  Com- 
mittee a  tentative  suggestion  that  this  body  will  join,  subject, 
of  course,  to  the  conditions  which  they  meet  in  Washington  in 
December,  so  that  the  Engineering  Standards  Committee  can 
go  to  Washington  with  the  added  precedence  of  this  splendid 
organization.  I  make  this  as  a  motion." 

The  motion  was  seconded  by  Colonel  Roberts  and  carried. 
Colonel  Roberts  then  read  the  complete  report  of  the  General 
Committee  on  Standardization  of  Mining  Equipment,  together 
with  the  reports  of  the  sub-committees,  all  of  which  were 
adopted  by  the  convention,  as  follows : 

Report  of  Conference  of  the 

GENERAL  COMMITTEE  ON  STANDARDIZATION  OF 
MINING  EQUIPMENT 

Held  in  Planters'  Hotel 
Sunday,  November  16,  3.00  P.  M. 


Mr.  George  R.  Woods,  Chairman — absent; 

Col.  Warren  R.  Roberts,  Acting  Chairman. 

For  the  information  of  those  present  at  this  conference  who 
have  not  attended  the  previous  Committee  Meetings,  it  may  be 
of  interest  to  outline,  briefly,  the  method  of  procedure  which 
the  Congress  has  adopted  for  accomplishing  this  work. 


330         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

A  General  Committee  was  first  appointed,  selected  carefully 
to  represent  the  various  interests  of  the  Industry,  including  the 
coal  operators,  manufacturers  of  coal  mining  equipment  and 
mining  engineers.  This  General  Committee  is  composed  as 
follows : 

Mr.  George  R.  Wood,  Consulting  Engineer,  Charleston, 
W.  Va.,  Chairman. 

Mr.  C.  E.  Watts,  Efficiency  Engineer,  Berwind-White 
Coal  Mining  Co.,  Windber,  Pa. 

Mr.  A.  B.  Kiser,  Electrical  Engineer,  Pittsburgh  Coal 
Co.,  Pittsburgh,  Pa. 

Mr.  A.  B.  Benedict,  Sales  Manager,  Goodman  Manufac- 
turing Co.,  Chicago,  111. 

Mr.  W.  J.  Montgomery,  Manager  Ventilating  Depart- 
ment, Jeffrey  Manufacturing  Co.,  Columbus,  O. 

Mr.  K.  A.  Pauly,  Power  and  Mining  Engineering  Depart- 
ment, General  Electric  Co.,  Schenectady,  N.  Y. 

Mr.  Carl  Scholz,  President  Valier  Coal  Co.,  Chicago,  111. 

Mr.  N.  D.  Levin,  Chief  Engineer,  Jeffrey  Manufacturing 
Co.,  Columbus,  Ohio. 

Col.  Warren  R.  Roberts,  President  Roberts  &  Schaefer 
Co.,  Chicago,  111. 

After  careful  consideration  this  General  Committee  decided 
on  following  classifications  of  Mining  Equipment  and  appointed 
members  of  the  General  Committee  to  act  as  Chairman  of  Sub- 
committees, who  should  have  charge  of  the  Standardization  of 
Equipment  of  such  classifications : 

1.  Mining  and  Loading  Equipment,  Mr.  Carl  Scholz. 

2.  Underground  Transportation,  Mr.  C.  E.  Watts. 

3.  Underground  Power  Transmission,  Mr.  A.  B.  Kiser. 

4.  Drainage,  Mr.  George  R.  Wood. 

5.  Ventilation,  Mr.  W.  J.  Montgomery. 

6.  Outside  Coal  Handling  Equipment,  Col.  Warren  R. 

Roberts. 

7.  Power  Equipment,  Mr.  K.  A.  Pauly. 

The  chairmen  of  these  various  sub-committees  were  instructed 
to  select  the  members  of  their  committees,  subject  to  the 
approval  of  the  American  Mining  Congress. 


STANDARDIZATION  OF  MINING  EQUIPMENT  331 

This  work  of  organizing  the  sub-committees  has  not  been 
entirely  completed,  but  the  following  is  the  list  of  sub-commit- 
tees which  have  been  organized : 

1.  Mining  and  Loading  Equipment,  Mr.  Carl  Scholz,  Chairman 

Committee  Members : 
Mr.  E.  N.  Zern,  Mining  Engineer  and  Editor  of  Mining 

Catalog,  Pittsburgh,  Pa. 
Mr.  C.  A.  Cabill,  Vice-President  Carbon  Coal  Co.,  Kana- 

wha  National  Bank  Building,  Charleston,  W.  Va. 
Mr.  N.  D.  Levin,  Jeffrey  Manufacturing  Co.,  Columbus, 

Ohio. 

Mr.  J.  M.  Clark,  Clark  &  Krebs,  Charleston,  W.  Va. 
Mr.  M.  Mitchell,  Sullivan  Machine  Co.,  St.  Louis,  Mo. 
Mr.  William  Whaley,  Myers- Whaley  Co.,  Knoxville,  Tenn. 
Mr.  William  0.  Duntley,  Duntley-Dayton  Co.,  1416  S. 

Michigan  Avenue,  Chicago,  111. 

Mr.  E.  S.  McKinley,  625  Denham  Building,  Denver,  Colo. 
Mr.  E.  G.  Hamilton,  310  Schultz  Bldg.,  Columbus,  Ohio. 
Mr.  D.  W.  Buchanan,  President  Old  Ben  Corporation, 

McCormick  Building,  Chicago,  111. 
Mr.  George  Holmes,  General  Superintendent,  Chicago 

Franklin  Coal  Co.,  Benton,  111. 

Mr.  Walter  Stevens,  Supt.,  Valier  Coal  Co.,  Valier,  111. 
Mr.  S.  W.  Farnham,  Mining  Engineer,  Goodman  Manu- 
facturing Co.,  Chicago,  111. 

2.  Underground  Transportation,  Mr.  C.  E.  Watts,  Chairman 

Committee  Members: 

Mr.  Charles  M.  Means,  Consulting  Engineer,  Pitts- 
burgh, Pa. 

Mr.  Graham  Bright,  Representing  the  Westinghouse 
Electric  and  Manufacturing  Co.,  Philadelphia,  Pa. 

Mr.  Joseph  Bryan,  General  Electric  Co.,  Pittsburgh,  Pa. 

Mr.  F.  C.  Coseo,  Representing  The  Jeffrey  Manufactur- 
ing Co.,  Columbus,  Ohio. 

Mr.  D.  F.  Lepley,  General  Manager,  Connellsville  Manu- 
facturing and  Mining  Supply  Co.,  Connellsville,  Pa. 

Mr.  E.  A.  Watters,  General  Manager,  Hicks  Coal  Inter- 
ests of  Western  Pennsylvania. 


332         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

3.  Underground  Power  Transmission,  Mr.  A.  B.Kiser,  Chairman 

(Committee  not  completed.) 

4.  Drainage,  Mr.  George  R.  Wood,  Chairman 

(Committee  not  completed.) 

5.  Ventilation,  Mr.  W.  J.  Montgomery,  Chairman 

Committee  Members : 
Mr.  E.  N.  Zern,  Mining  Engineer  and  Editor  "Mining 

Catalog,"  Pittsburgh,  Pa. 
Mr.  J.  R.  Robinson,  President,  Robinson  Ventilating 

Co.,  Pittsburgh,  Pa. 
Mr.  G.   E.  Lyman,   General  Superintendent,  Madison 

Coal  Corporation,  Glen  Carbon,  111. 

6.  Outside  Coal  Handling  Equipment,  Col.  Warren  R.  Roberts, 

Chairman 

Committee  Members : 

Mr.  G.  F.  Osier,  G.  S.  Carnegie  Coal  Co.,  Pittsburgh,  Pa. 

Mr.  W.  A.  Bishop,  G.  S.  Pocahontas  Consolidated  Col- 
lieries, Pocahontas,  Va. 

Mr.  F.  W.  Whiteside,  Chief  Engineer,  Victor  American 
Fuel  Co.,  Denver,  Colo. 

Mr.  F.  G.  Morris,  G.  S.  Coal  Mines,  Republic  Iron  and 
Steel  Co.,  Sayreton,  Ala. 

Mr.  A.  J.  Sayres,  C.  E.  Link  Belt  Co.,  Chicago,  111. 

Mr.  W.  J.  Patterson,  President  Heyl  &  Patterson  Co., 
Pittsburgh,  Pa. 

7.  Power  Equipment,  K.  A.  Pauly,  Chairman 

Committee  Members : 

Operators'  Representatives. 
Mr.  M.  D.  Kirk,  Pittsburgh  Terminal  Railroad  &  Coal 

Co.,  Pittsburgh,  Pa. 
Mr.  W.  C.  Shunk,  Stonega  Coal  &  Coal  Co.,  Big  Stone 

Gap,  Va. 
Mr.  J.  T.  Jennings,  Philadelphia  &  Reading  Coal  &  Iron 

Co.,  Pottsville,  Pa. 


STANDARDIZATION  OF  MINING  EQUIPMENT  333 

Mr.  R.  L.  Kingsland,  Consolidated  Coal  Co.,  Fairmont, 
West  Virginia. 

Mr.  G.  S.  Thompson,  Colorado  Fuel  &  Iron  Co.,  Pueblo, 
Colorado. 

Mr.  D.  C.  McKeeham,  Union  Pacific  Coal  Co.,  Rock 
Springs,  Wyo. 

Representatives  from  Alabama  and  Utah  not  yet  ap- 
pointed. 

Consulting  Engineers. 
Mr.  H.  F.  Randolph,  Pittsburgh,  Pa. 
Mr.  W.  C.  Adams,  with  Allen  &  Garcia,  Chicago,  111. 

Bureau  of  Mines 
Mr.  0.  P.  Hood. 

Manufacturers'  Representatives 

Mr.  Graham  Bright,  Westinghouse  Electric  and  Manu- 
facturing Co.,  Pittsburgh,  Pa. 
Mr.  Nicht,  Allis  Chalmers  Co.,  Milwaukee,  Wis. 
Mr.  K.  A.  Pauly,  General  Electric  Co.,  Schenectady, 
New  York. 

MINUTES  OF  SUNDAY'S  MEETING 

Col.  Warren  R.  Roberts,  Acting  Chairman,  presiding. 
Col.  Roberts  called  for  PROGRESS  REPORTS  from  the  various 
sub-committees. 

1.  Subcommittee  on  Mining  and  Loading  Equipment. 

Mr.  Carl  Scholz,  Chairman,  being  absent,  this  report  was 
made  by  Mr.  S.  W.  Farnham. 

"There  is  only  one  member  present  who  attended  the  meet- 
ings of  the  Transportation  Committee  and  also  the  sessions  of 
the  General  Committee.  The  Committee  heartily  approves  the 
work  that  has  been  started  and  concurs  with  the  views 
expressed  in  the  various  meetings.  I  will  report  back  to  the 
Committee  the  results  of  the  work  at  these  sessions." 

Note. — Since  the  above  report  was  received  by  the  General 
Committee,  other  members  of  this  Subcommittee  having 
arrived,  a  supplementary  report  has  been  handed  to  the  General 
Committee,  and  is  attached  hereto. 


834         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

2.  Subcommittee  on  Underground  Transportation,  Mr.  C.  E. 

Watts,  Chairman. 

"The  Committee  on  Underground  Transportation  has  met 
and  given  consideration  to  the  possibility  of  bringing  within 
reasonable  standards — and  thereby  simplifying,  to  a  great 
extent,  much  of  the  new  unnecessary  duplication  of  many  of 
the  items  now  connected  with  apparatus  used  in  underground 
transportation ;  and  it  is  the  sense  of  this  Committee  that  it  is 
feasible  and  possible  to  accomplish  standardization  without 
interfering  with  the  interest  of  operator  or  manufacturer,  and 
with  ultimate  benefit  to  both. 

"Some  of  the  subjects  which  should  receive  consideration  are 
as  follows :  Track  gauge  and  rail  weights  and  general  features 
of  locomotive  and  pit  car  design. 

"It  seems  that  these  matters  will  afford  an  ample  and  rich 
field  for  consideration.  The  Committee  asks  to  be  continued, 
and  will  report  back  to  the  General  Committee  the  results  of 
its  efforts." 

3.  Subcommittee  on  Underground  Power  Transportation,  Mr. 

A.  B.  Riser,  Chairman  (absent). 
No  report  from  this  Subcommittee. 

4.  Subcommittee   on  Drainage,   George  R.   Wood,   Chairman 

(absent). 
No  report  from  this  Subcommittee. 

5.  Subcommittee  on  Ventilation,  W.  J.  Montgomery,  Chairman. 
This  Subcommittee  rendered  written  report,  as  per  attached. 

6.  Subcommittee  on  "Outside  Coal  Handling  Equipment,"  Col. 

Warren  R.  Roberts,  Chairman. 
This  Subcommittee  rendered  written  report,  as  per  attached. 

7.  Subcommittee  on  Power  Equipment,  K.  A.  Pauly,  Chairman. 
"Those  members  of  the  Subcommittee  on  Power  Equipment 

who  are  present  have  attended  the  meetings  of  the  General 
Standardization  Committee  and  heartily  endorse  the  movement, 
which  has  for  its  ultimate  object  the  standardization  of  mining 


STANDARDIZATION  OF  MINING  EQUIPMENT  335 

equipment.  We  believe  it  to  be  entirely  possible  through  its 
efforts  to  bring  about  the  enactment  of  uniform  laws  in  the 
several  States  which  will  be  of  mutual  benefit  to  both  the 
operator  and  the  manufacturer  of  mining  equipment. 

"Considerable  valuable  work  has  already  been  done  by  the 
Bureau  of  Mines  and  others,  and  our  Subcommittee  through 
close  co-operation  with  the  Bureau  of  Mines,  will  take  advan- 
tage of  the  results  which  have  already  been  accomplished. 

"We  will  keep  the  General  Standardization  Committee  in 
touch  with  our  work  and  submit  to  it  for  its  approval  any  and 
all  recommendations  which  we  see  fit  to  make." 

The  General  Committee,  having  received  these  various  reports 
from  the  Subcommittees,  indicates  its  approval  of  the  method 
of  procedure  of  the  various  Subcommittees — as  indicated  by 
their  respective  reports — and  approves  the  suggestions  made 
by  the  Subcommittees  that  they  continue  their  work,  reporting 
back  from  time  to  time  to  the  General  Committee. 

The  Committee  adjourned,  to  meet  in  the  same  room  tomor- 
row (Monday)  morning,  at  9.30  o'clock. 

WARREN  R.  ROBERTS, 
Acting  Chairman,  General  Committee. 

C.  E.  WATTS, 
Chairman,  Subcommittee  "Underground  Transportation." 

S.  WT.  FARNHAM, 

Acting   Chairman,   Subcommittee   Mining   and   Loading 
Equipment. 

W.  J.  MONTGOMERY, 
Chairman,  Subcommittee  Ventilation. 


CONFERENCE  OF  GENERAL  COMMITTEE 
Monday,  November  17,  9.30  A.  M. 

The  meeting  opened  with  a  reading  by  the  Acting  Secretary 
of  the  condensed  report  of  the  conference  of  this  committee, 
held  on  Sunday,  November  16,  1919,  indicating  the  way  in 
which  the  work  of  this  Committee  was  organized,  including  the 
formation  of  the  General  Committee  on  Standardization  of 


336         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Mining  Equipment,  and  the  classification  of  mining  equipment 
made  by  this  General  Committee.  Also  giving  a  list  of  the 
chairmen  of  all  Subcommittees  according  to  these  classifica- 
tions, and  followed  by  a  list  of  all  Subcommittees  which  were 
organized  to  date. 

The  record  also  gave  brief  reports  from  all  Subcommittees 
thus  far  organized. 

These  reports  were  carefully  reviewed  and  corrected  at  this 
conference,  for  presentation  to  the  American  Mining  Congress 
for  approval  and  for  further  instructions  regarding  the  work 
of  these  committees. 

In  presenting  this  report  to  the  Congress,  the  General  Com- 
mittee suggests  that  if  the  present  by-laws  of  The  American 
Mining  Congress  do  not  provide  for  such  a  committee  as  this, 
that  the  by-laws  be  changed  so  as  to  constitute  this  committee 
on  Standardization  of  Mining  Equipment  as  one  of  the  perma- 
nent standing  committees  of  the  Congress. 

In  submitting  this  report,  your  Committee  recommends  that 
The  American  Mining  Congress  accept  the  invitation  already 
extended  to  the  Congress  by  the  American  Engineering  Stand- 
ards Committee  to  join  the  work  of  that  Committee. 

In  making  this  recommendation  your  Committee  wishes  to 
advise  that  by  joining  this  American  Engineering  Standards 
Committee,  we  are  under  no  obligation  to  submit  to  them  any 
standards  which  may  be  evolved  by  our  Committees,  excepting 
when  such  standards  seem  to  us  to  have  a  general  application 
to  other  industries.  In  other  words,  that  our  Committees  on 
Standardization  of  Mining  Equipment  can  carry  forward  their 
work  if  they  so  chose,  independent  of  the  work  of  the  American 
Engineering  Standards  Committee. 

The  advantage  to  the  American  Mining  Congress  and  its 
committees  on  Standardization  by  joining  this  general  move- 
ment on  standardization,  would  be  that  our  committees  could 
call  on  the  various  engineering  societies  and  governmental 
departments  forming  the  American  Engineering  Standards 
Committee  for  information  regarding  standards  which  may 
have  already  been  adopted  by  any  of  these  organizations.  Our 
committees  on  standardization  could  also  meet  with  similar 
committees  from  the  other  societies  and  be  of  mutual  help  in 
formulating  new  standards. 


STANDARDIZATION  OF  MINING  EQUIPMENT  337 

It  is  also  very  essential  that' certain  of  our  committees  having 
to  do  with  the  standardization  of  certain  equipment  which  has 
already  been  standardized  by  other  societies,  or  may  be  in  the 
process  of  standardization,  should  consult  with  these  societies, 
otherwise  duplicate  standards  will  be  established  to  the  great 
detriment  of  this  movement.  ^  .  •. 

The  only  obligation  which  The  American  Mining  Congress 
assumes  in  joining  this  general  movement  of  standardization 
would  be  to  bear  their  proportionate  part  of  the  expense  of 
maintaining  the  American  Engineering  Standards  Committee, 
which  expense  your  Committee  does  not  think  you  will  find 
burdensome. 

The  conference  then  adjourned,  to  meet  upon  call  of  the 
Chairman. 

WARREN  R.  ROBERTS, 
Acting  Chairman,  General  Committee. 

C.  E.  WATTS, 
Chairman,  Subcommittee  "Underground  Transportation." 

S.  W.  FARNHAM, 

Acting   Chairman,   Subcommittee   Mining   and   Loading 
Equipment. 

W.  J.  MONTGOMERY, 
Chairman,  Subcommittee  Ventilation. 


5.  SUPPLEMENTAL  REPORT  OF  SUBCOMMITTEE  ON 
MINING  AND  LOADING  EQUIPMENT 

(MR.  CARL  SCHOLZ,  Chairman.) 

At  a  subsequent  meeting  of  this  Committee,  attended  by 
S.  W.  Farnham,  N.  D.  Levin,  W.  Whaley  and  E.  N.  Zern,  held 
on  Monday  afternoon,  November  17th,  at  the  Planters'  Hotel, 
the  following  supplementary  report  was  made : 

We  approve  of  the  report  made  by  Mr.  S.  W.  Farnham  and 
already  submitted  to  the  General  Committee. 

We  also  wish  to  emphasize  the  desirability  of  standardization 
of  track  gauges  in  the  interest  of  both  cutting  and  loading 
machinery. 


338         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

We  urge  that  wherever  mining  machinery  is  employed  elec- 
tric circuits  be  well  kept  up  in  order  that  a  heavy  drop  of  volt- 
age at  the  motors  be  avoided. 

We  recommend  that  prior  to  the  installation  of  cutting  or 
loading  machinery  a  plan  of  operation  be  adopted  and  the  work- 
ings be  so  laid  out  as  to  reduce  to  a  minimum  delays  in  chang- 
ing cars  and  in  the  movement  of  the  machines  from  place  to 
place. 

We  recommend  in  the  interest  of  loading  machines  that  the 
clearance  between  the  top  of  car  and  roof  of  mine  be  sufficient 
to  facilitate  the  loading  of  cars  by  machinery. 

We  recommend  further  in  the  interest  of  loading  machines 
that  mine  cars  of  large  capacity  be  used  wherever  possible. 

S.  W.  FARNHAM, 
WM.  WHALEY, 
E.  N.  ZERN. 

6.  REPORT  OF  THE  SUBCOMMITTEE  ON  STANDARDI- 
ZATION OF  "OUTSIDE  COAL  HANDLING  EQUIP- 
MENT." 

PREAMBLE. 

It  is  the  sense  of  this  Subcommittee  and  they  recommend  to 
the  General  Committee  on  Standardization  of  Coal  Mining 
Equipment,  a  general  program  for  inaugurating  this  movement 
of  standardization  about  as  follows : 

That  each  Subcommittee  should  take  up  the  more  general  and 
important  matters  connected  with  the  designing  and  installa- 
tion of  the  equipment  included  under  their  subdivision  for 
standardization. 

After  a  careful  study  of  these  problems,  recommendations 
should  be  made  to  the  General  Committee  along  the  general 
lines  of  standardization  covering,  for  example,  such  subjects  as 
are  outlined  below. 


No.  1.  Clearances:  This  Committee  recommends  that  over- 
head and  side  clearances  of  outside  mine  structures  over  load- 
ing tracks  be  made  as  nearly  uniform  as  possible,  taking  into 
account  the  railroad  regulations  and  State  laws  in  the  various 
districts. 


STANDARDIZATION  OF  MINING  EQUIPMENT  339 

Where  present  State  laws  work  hardship  on  Coal  Operators 
as  regards  clearances  of  mine  structures,  that  some  effort  be 
made  to  have  this  corrected,  and  to  aid  in  the  making  of  new 
and  uniform  laws  in  States  having  no  regulations. 

No.  2.  Clearance  for  Over  Wind:  This  Committee  recom- 
mends that  the  designing  tipples  and  head  frames  engineers 
and  designers  allow  enough  distance  between  point  of  dump 
and  sheave  wheels  to  take  care  of  over,  wind,  taking  into  con- 
sideration the  gradual  introduction  of  high  speed  hoists;  that 
engineers  and  designers  confer  with  manufacturers  of  hoisting 
machinery  before  arriving  at  the  clearance  required. 

No.  3.  Fire  Protection:  This  Committee  recommends  that 
the  practice  required  now  by  certain  State  laws  for  fireproof 
structures  adjacent  to  the  mine  openings,  be  approved,  and 
recommends  that  The  American  Mining  Congress  use  their 
influence  to  secure  similar  and  uniform  legislation  in  other 
States. 

No.  4-  Suggested  Standardization  for  Merchandising  Ma- 
chinery: That  manufacturers  of  machinery  for  use  about 
mines  be  encouraged  to  standardize  all  parts  of  machinery  as 
far  as  possible.  A  number  of  manufacturers  have  standard- 
ized drive  chains  and  sprockets,  and  the  Committee  recom- 
mends that  this  commendable  practice  be  extended  as  far  as 
practicable  to  other  and  similar  equipment. 

No.  5.  Co-ordination  of  Work  of  Subcommittees:  This  Com- 
mittee in  attempting  to  formulate  a  program  of  standardization 
for  "Outside  Coal  Handling  Equipment,"  recognized  the  neces- 
sity for  the  previous  standardization  of  certain  equipment  to  be 
standardized  by  other  subcommittees,  for  the  reason  that  in 
designing  the  equipment  covered  by  the  work  of  this  subcom- 
mittee certain  data  and  information  furnishes  the  basis  for  the 
designing  of  such  equipment  and  any  changes  looking  to  stand- 
ardization of  the  equipment  allotted  to  other  subcommittees 
will  necessarily  become  the  basis  of  information  used  in  design- 
ing the  equipment  of  this  committee.  This  Committee,  there- 
fore, recommends  the  closest  co-ordination  of  the  work  carried 
on  by  the  various  subcommittees.  This  can  be  done  by  each 


340         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

subcommittee  rendering  frequent  progress  reports  to  the  Gen- 
eral Committee,  which,  in  turn,  will  transmit  such  reports  to 
other  subcommittees  for  their  information.  In  other  words, 
the  General  Committee  will  become  the  clearing  house  through 
which  all  subcommittees  will  carry  on  their  work. 
Respectfully  submitted, 

WARREN  R.  ROBERTS,  Chairman. 
G.  F.  OSLER. 

5.  REPORT  OF  SUBCOMMITTEE  ON  VENTILATION 
(MR.  W.  J.  MONTGOMERY,  Chairman.) 

GENTLEMEN  : 

The  Subcommittee  on  Fans  and  Ventilation  begs  to  submit 
the  following  report. 

It  is  a  well  recognized  fact  that  no  machinery  around  the 
mine  receives  less  attention  than  ventilating  equipment.  It  is 
also  well  known  that  air  ways  in  many  instances  are  woefully 
neglected,  and  many  mines  today  are  ventilated  under  the  most 
adverse  conditions,  and  with  excessive  power  consumption. 

In  order  to  improve  conditions  we  would  suggest  the  follow- 
ing with  respect  to  Mine  Fans : 

1.  That  there  be  a  maximum  inlet  velocity  varying  with 

the  water  gauge  at  which  the  fan  is  working. 

2.  That  there  be  a  maximum  discharge  velocity  into  the 

open  atmosphere  varying  with  the  water  gauge  at 
which  the  fan  is  working. 

3.  That  all  fans  be  so  constructed  and  set  that  they  may 

be  readily  reversed  in  case  of  necessity. 

4.  That  provisions  be  made  on  all  fan  shafts  for  the 

installation  of  an  auxiliary  drive. 

Booster  Fans  are  recommended  for  use  in  mines  where  a 
section  is  so  remote  as  to  become  insufficiently  ventilated  and 
where  a  permanent  fan  on  the  outside  is  in  use,  but  we  do  not 
approve  of  the  use  of  a  booster  fan  as  a  permanent  installation. 

Fan  Drives. 

We  believe  in  the  case  of  moderate  to  large  capacity  mines  it 
is  advantageous  to  the  operator  to  install  a  permanent  fan  at 


STANDARDIZATION  OF  MINING  EQUIPMENT  341 

the  beginning  of  operation,  and  that  where  the  fan  is  not  too 
distantly  located  from  the  boiler  house,  a  steam  engine  drive  is 
better  adapted;  this  because  it  is  more  economical  than  an 
electric  drive  and  because  the  speed  of  the  fan  is  more  easily 
regulated.  Where  electricity  is  the  power  employed  at  a  mine 
with  a  large  fan,  we  recommend  a  slip  ring  motor  in  preference 
to  a  squirrel  case  type. 

Air  Ways. 

With  respect  to  air  ways,  we  believe  that  no  mine  should  be 
permitted  to  get  into  such  a  condition  as  to  require  a  water 
gauge  of  over  3  inches  to  properly  ventilate  it,  and  as  a  means 
to  this  end  we  recommend  as  follows : 

1.  That  all  air  ways  be  driven  straight  and   where 

changes  in  direction  are  necessary  that  they  be 
made  by  long  radius  curves. 

2.  That  an  easement  be  provided  at  the  bottom  of  the 

fan  air  shaft  to  enable  a  change  of  direction  with  a 
minimum  of  shock. 

3.  That  all  air  ways  be  kept  clean  and  free  from  accumu- 

lations of  falls,  mine  cars,  old  timbers,  etc. 

4.  That  where  overcasts  are  used  the  air  ways  over  the 

bridge  be  of  the  same  cross  section  as  found  in  the 
entries  and  that  an  easement  be  provided  on  each 
side  of  the  bridge. 

5.  That  in  the  interest  of  both  safety  and  economy  the 

air  be  divided  into  several  splits  rather  than  forced 
to  travel  in  one  continuous  current. 

6.  That  all  brattices  and  stopping  be  made  air  tight. 

7.  That  the  air  shall  not  pass  through  old  workings  to 

new  workings. 

8.  That  wherever  possible  in  a  mine,  air  be  brought  in 

or  discharged  from  openings  at  points  remote  from 
the  fan. 

9.  That  where  labor  and  roof  conditions  permit  the 

multiple  entry  system  be  used. 

10.  That  a  change  in  the  laws  governing  cross  cuts  be 
enacted  permitting  parallel  entries  to  be  driven  two 
hundred  feet  or  more  before  a  cross  cut  is  made. 


342         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  ventilation  of  these  entries  to  be  accomplished 
by  means  of  small  auxiliary  fans  and  the  air  cur- 
rent carried  to  the  face  through  tubing. 

This  method  will  reduce  the  cost  of  making  numerous  cross 
cuts  and  building  stoppings,  prevent  a  vast  amount  of  air  leak- 
age and  short  circuiting,  and  in  turn  greatly  reduce  the  volume 
of  air  the  permanent  fan  must  handle  with  a  corresponding 
decrease  in  power  consumption. 

W.  J.  MONTGOMERY,  Chairman. 
E.  N.  ZERN. 


THE  RUSSIAN  RADICAL— AS  I  FOUND  HIM  343 


THE  RUSSIAN  RADICAL— AS  I  FOUND  HIM 

Address  by  GEORGE  W.  SIMMONS,  of  St.  Louis,  Before  The  American 

Mining  Congress 

My  connection  with  the  Red  Cross  has  been  as  manager  of 
the  Southwestern  Division  here,  comprising  the  States  of 
Missouri,  Arkansas,  Kansas,  Oklahoma  and  Texas,  with  head- 
quarters in  St.  Louis,  Mo.  I  went  to  France  in  that  connection, 
and  because  of  my  knowledge  of  the  Red  Cross  work  was  asked 
to  go  to  Siberia. 

I  am  sorry  that  the  short  time  allotted  me  will  not  permit 
me  to  tell  you  something  of  the  magnificent  work  your  Red 
Cross  is  doing  in  Siberia.  I  can  only  say  that  it  bears  up  with 
the  achievements  of  your  Red  Cross  throughout  the  rest  of  the 
world.  [Applause.]  What  you  did  in  France,  what  you  did  in 
America  and  what  you  have  done  and  are  doing  today  up  and 
down  through  those  countries  of  Eastern  Europe,  through 
Esthonia,  Lithuania  and  all  the  rest  of  those  destitute  countries 
where  they  have  so  heavily  felt  the  burden  of  the  war,  your 
American  Red  Cross,  as  your  agent,  is  holding  out  its  hands  of 
friendship  and  assistance  to  help  them  back  on  their  feet. 
[Applause.] 

"Close-Up"  of  Bolshevism 

The  subject  assigned  to  me  is  to  tell  you  something  of  Bol- 
shevism, and  I  respond  because  I  believe  it  is  my  duty  to  convey 
my  impressions  to  those  who  did  not  have  an  opportunity  of 
seeing  it  absolutely  first  hand,  as  I  did.  I  went  there  without 
knowing  anything  about  it.  I  went  as  an  American  business 
man,  to  organize  the  work  of  the  Red  Cross,  and  what  I  saw 
and  heard  of  Bolshevism  I  saw  with  my  own  eyes  and  heard 
with  my  own  ears.  I  handled  the  victims  with  my  own  hands, 
but  I  do  not  propose  to  discuss  theories  with  "parlor  Bolshe- 
viks" here. 

My  work  took  me  across  Siberia  and  well  into  European 
Russia,  and  may  I  pause  here  to  give  a  little  knowledge  of  dis- 
tance? From  here  to  San  Francisco,  some  2,500  miles,  and 


344         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

then  double  that  distance  across  the  Pacific,  and  then  I  was 
hardly  half  way;  then  across  country,  across  Siberia,  almost 
6,000  miles  more  before  we  reached  the  furthermost  western 
point  that  any  American  can  reach.  The  place  is  so  big  that 
we  do  not  realize  that  things  which  work  on  a  small  scale  can- 
not work  on  a  large  scale. 

Nothing  But  Blood  and  Murder 

We  went  out  through  that  western  country  and  saw  the 
effects  of  Bolshevism,  where  the  Bolsheviki  had  complete  con- 
trol from  6  to  12  months  and  a  full  opportunity  to  put  into 
practice  any  of  their  theories  they  wanted  to  try.  In  our  12 
weeks  searching  we  did  not  find  one  constructive  act  attempted 
by  the  Bolshevists ;  nothing  but  blood  and  murder.  They  made 
no  effort  whatever  to  practice  what  they  preached.  The  only 
division  of  wealth  that  I  could  find  trace  of  was  the  division 
from  the  man  who  had  it  to  the  Bolshevist  who  took  it  away 
from  him  at  the  point  of  a  gun,  and  usually  after  he  had  taken 
the  life  of  the  victim  as  well.  The  individual  has  no  rights, 
and  under  Bolshevism,  if  he  opposes,  even  by  thought,  he  is 
shot  on  the  spot  without  any  trial,  without  any  semblance  to 
give  the  man  a  show,  to  state  his  own  convictions. 

All  Males  Murdered 

To  illustrate  what  I  mean,  I  can  give  you  one  definite  case. 
We  were  in  the  office  of  Admiral  Kolchak,  the  head  of  the 
Siberian  Government.  Admiral  Kolchak  is  a  good  man,  an 
honest  man,  but  he  has  been  terribly  up  against  it.  Kolchak 
has  no  equipment  for  his  forces.  There  is  no  merchandise  to  be 
had  in  Siberia.  You  could  not  buy  a  lead  pencil  for  a  thousand 
dollars ;  it  does  not  exist.  When  in  his  office,  he  showed  me  a 
telegram  translated  by  our  own  Red  Cross  interpreter,  from  a 
little  town  in  Osa,  from  the  general  commanding  Kolchak's 
forces,  saying :  "We  have  just  captured  the  town  of  Osa.  There 
are  no  males  left  in  the  city.  Of  10,000  population,  2,000  have 
been  killed.  Send  some  men  to  run  the  electric  plants,"  etc. 

It  took  us  six  days  across  country  by  sleigh,  through  the 
mountains,  through  the  woods,  where  we  would  sleep  at  night 
in  the  peasants'  houses,  throwing  our  blanket  rolls  on  the  floor 
and  trusting  to  luck  that  we  would  not  take  with  us  something 


THE  RUSSIAN  RADICAL— AS  I  FOUND  HIM  345 

we  had  not  brought,  and  it  was  luck  when  we  didn't,  because 
those  peasants'  houses  were  not  the  cleanest. 

As  we  went  through  these  towns  we  saw  the  effects  of  Bol- 
shevism. We  talked  with  individual  peasants.  They  are  a 
kindly  people,  most  curious.  They  flocked  to  our  sleighs  when 
we  stopped  for  tea  twice  during  the  day.  It  was  pretty  cold 
going  for  us,  who  were  not  used  to  it,  and  in  every  town  it  was 
the  same  story. 

Securing  Evidence 

Finally  we  came  to  Osa,  the  little  town  where  these  atrocities 
had  been  committed,  and  I  said:  "I  cannot  take  back  home 
second-hand  information.  Can't  you  arrange  it  so  that  tomor- 
row morning  I  can  see  the  widows  and  the  sisters  and  the 
mothers  of  these  people  who  have  been  killed  and  talk  with 
them  myself?"  And  I  did.  The  next  morning  I  secured  from 
about  50  different  women,  one  at  a  time,  the  exact  details  of  the 
murder  of  their  husbands  or  fathers,  with  the  dates  and  ex- 
cuses given,  if  any. 

Bolshevik  Pastimes 

They  assess  a  man  a  certain  amount  of  money  and  it  does 
not  make  much  difference  whether  he  pays  it  or  not.  We  found 
instances  of  where  a  man  was  assessed  5,000  rubles  and  be- 
cause he  did  not  have  it  they  killed  him.  Another  man  was 
assessed  25,000  rubles.  He  paid  it  and  then  they  killed  him 
because  he  had  too  much.  Another  man  was  killed  because  he 
lived  in  a  brick  house.  I  saw  the  body  of  that  man  dug  up 
from  a  grave  by  his  son  and  have  a  picture  of  it.  Another  man 
was  killed  because  he  worked  for  a  rich  family.  He  was  the 
man  who  attended  the  fires  and  kept  the  snow  cleaned  away  in 
the  winter  time.  They  were  killing  off  the  rich,  so  they  killed 
him  with  them.  Everybody  connected  with  the  courts,  with 
the  churches,  with  the  schools,  were  killed ;  murdered  without 
rhyme  or  reason,  because  Bolshevism  is  opposed  to  education, 
religion  and  private  ownership  of  property. 

We  here  in  America  think  if  a  man  owns  his  own  home  it  is 
the  best  thing  that  can  be  done  for  the  country.  That  is  a 
crime  in  the  Bolshevik  calendar  that  is  punishable  by  death ; 
he  has  no  right  to  own  anything. 


346         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

So  we  went  from  town  to  town  and  found  those  instances. 
That  afternoon  we  went  out  about  a  mile  from  Osa  to  a  great 
plain  where  the  bodies  of  these  victims  (who  had  been  killed 
from  the  29th  of  August  along  to  the  middle  of  November,  and 
those  that  were  buried)  had  been  frozen  since  the  first  of 
November,  when  winter  starts  in.  The  families  had  been  going 
back  and  started  to  dig  up  these  bodies  and  give  them  a  decent 
burial. 

White  Collar  Is  Death  Sentence 

As  we  went  there  to  see  that  first-hand,  I  will  describe  one  or 
two  scenes  to  illustrate:  There  were  the  bodies  of  two  men 
and  their  crime  had  been  that  they  were  clerks  in  a  tannery  in 
the  town.  As  Ambassador-  Francis  said :  "A  white  collar  is  a 
death  sentence."  There  was  the  body  of  a  woman,  and  some 
relatives  said :  "If  that  is  the  body  of  Madame  So-and-so,  in- 
side a  pocket,  in  between  the  lining  of  her  skirt,  are  some 
family  heirlooms/'  And  sure  enough,  there  they  were.  I  took 
them  and  laid  them  on  the  side  of  the  grave,  and  that  was  the 
means  of  identification. 

German  Trick  Caused  Revolution 

That  is  Bolshevism  in  practice.  The  cruelty  of  it,  the  bar- 
barity, is  something  almost  beyond  description,  and  yet  we 
wonder  why  they  have  apparently  been  so  cruel.  I  got  the  story 
pretty  straight  over  there,  and  then  when  I  came  home  I  talked 
with  Ambassador  Francis,  and  he  has  told  me  the  inside  of  it, 
all  of  the  workings  of  the  Duma  and  the  Czar ;  how  he  promised 
to  ratify  two  decrees  to  enlarge  the  powers  of  the  Duma,  and 
how  those  decrees  were  brought  to  the  Czar  to  sign,  in  the 
presence  of  the  Czarina,  and  she,  with  her  German  sympathies, 
flew  into  a  rage  and  forced  her  husband  to  sign  a  decree  dis- 
solving the  Duma. 

The  Duma  would  not  be  dissolved,  and  the  Czar  called  the 
soldiers  to  arrest  the  Duma  and  they  went  over  to  the  Duma, 
and  then  he  called  out  another  regiment  and  they  did  likewise, 
and  then  the  Czar  abdicated.  But  he  did  not  have  the  nerve  to 
tell  his  wife  that  he  had  abdicated ;  he  was  under  such  terror  of 
her  and  her  German  connections.  All  that  story  we  got. 


THE  RUSSIAN  RADICAL— AS  I  FOUND  HIM  347 

Germans  in  Control 

The  thing  that  surprised  me  the  most  was  the  absolute  domi- 
nation of  Russia  by  Germany  before  the  war.  Many  of  the 
governors  of  provinces  were  Germans,  the  head  of  the  Russian 
Secret  Service  had  a  German  wife,  and  the  head  of  the  Russian 
Army  Supply  Department  time  and  time  again  accidentally  lost 
supplies  routing  them  via  the  Arctic  Ocean. 

In  spite  of  all  that,  the  Russian  people,  as  a  whole,  were  true 
and  solid  down  in  the  bottom  of  their  hearts.  In  spite  of  their 
Government,  they  kept  their  army  fighting  through  the  little 
community  organizations. 

American  Recognition  of  Revolution 

Ambassador  Francis  did  one  of  the  most  magnificent  things 
of  the  war  when  he  recognized  the  Kerensky  Government  after 
that  revolution  that  opposed  the  Czar.  That  delayed  for  eight 
months  the  German  drive  on  Paris,  that  drive  which  later  took 
place  in  March,  1919.  I  was  in  France  and  know  what  that 
drive  was,  and  by  delaying  that  drive  he  held  on  the  eastern 
front  a  million  or  more  German  troops  that,  had  they  been 
transferred  eight  months  sooner,  before  France  and  England 
were  ready,  would  have  wiped  them  off,  and  all  because  our 
"Dave,"  of  St.  Louis,  had  the  nerve  and  foresight  to  say  to 
President  Wilson:  "Authorize  me  to  recognize  this  govern- 
ment. It  is  our  only  salvation."  President  Wilson  cabled  back : 
"Go  ahead." 

Germany  had  been  fighting  to  batter  down  the  defenses  of 
Russia,  and  then  she  saw  her  chance  to  accomplish  this  by  her 
intrigue  as  she  had  failed  to  do  with  her  army.  She  sent  to 
Switzerland  and  got  Lenine  and  Trotzky  to  carry  out  her  bid- 
ding, to  destroy  the  Russian  army,  destroy  the  Russian  indus- 
try and  demoralize  the  Russian  people.  And  they  did  it 
promptly. 

Lenine  Was  Clever 

Lenine  said  to  the  Russians :  "No  more  war,  no  more  work. 
Division  of  lands  and  division  of  money."  Do  you  wonder  that 
those  simple  people,  85  per  cent,  of  whom  can  neither  read  nor 
write,  jumped  at  that  ?  Within  three  days  Trotzky,  with  a  little 


348         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

band  of  soldiers,  had  possession  of  every  firearm,  and  it  was  a 
capital  offense  to  have  possession  of  one. 

Then  he  started  to  get  his  army  together.  The  workmen 
said :  "No,  we  don't  want  to  fight."  But  they  were  told  they 
must  fight,  and  those  who  did  not  were  shot,  and  the  others 
gave  in  to  save  their  lives.  Kerensky  was  a  good  man,  but  he 
was  not  strong  enough  to  swing  the  job. 

Trotzky  sent  down  and  got  1 00,000  Chinese  coolies,  who  were 
the  scum  of  the  earth,  and  put  them  in  the  rear  ranks  of  the 
Red  army,  and  they  are  there  today  to  shoot  in  the  back  any 
Russian  peasants  in  case  they  give  way  before  the  attacks  of 
Kolchak.  That  is  the  way  they  have  held  their  control. 

Lenine  a  Dreamer 

And  yet  Lenine  himself  is  a  dreamer,  a  crazy  fanatic  appar- 
ently, but  honest  and  sincere,  so  everybody  says.  Lenine  has 
this  one  ideal  of  the  universal  idea  of  men  and  the  destruction 
of  government.  You  say  to  him:  "Did  you  use  German 
money?"  And  he  will  answer:  "Sure  I  did.  I  will  use  Ger- 
man money,  your  money,  or  anybody's  money,  if  it  will  help  me 
accomplish  'Universal  Brotherhood  of  Man/  "  You  ask :  "Do 
you  approve  of  Trotzky's  methods  of  bloodshed  and  murder?" 
And  he  will  say :  "No,  but  if  it  will  help  accomplish  'Universal 
Brotherhood  of  Man,'  it  must  be  done." 

Lenine  made  a  statement  in  which  he  said  that  they  realized 
that  in  an  agricultural  country  like  Russia,  with  some  85  per 
cent,  of  the  people  living  on  farms,  Bolshevism  could  never 
succeed.  "But,"  said  Lenine,  "before  we  have  failed  here  we 
will  have  kindled  the  fire  throughout  the  world  that  will  never 
be  quenched." 

World-Wide  Propaganda 

It  is  well  known  that  they  took  over  billions  of  dollars  of 
gold  and  they  secured  the  control  of  Petrograd.  It  is  reported 
that  most  of  that  is  being  spent  outside  of  Russia  and  not  inside 
of  Russia.  It  is  being  spent  to  light  the  fires  throughout  the 
rest  of  the  world,  and  that  means  here  and  in  England  and 
France  and  various  other  places. 

Underneath  it  all,  it  seems  to  me,  there  is  at  least  a  chance 
that,  if  Germany  had  it  within  her  power  to  snatch  from  the 


THE  RUSSIAN  RADICAL— AS  I  FOUND  HIM  349 

rest  of  the  world  the  fruits  of  our  victory,  by  her  intrigue,  after 
she  had  failed  with  the  force  of  her  army,  she  would  cer- 
tainly do  so;  that  Germany  is  today  waging  an  economic  war 
to  regain  the  trade  supremacy  in  the  world  is  evident  on  every 
side  in  my  own  business. 

I  was  informed  by  one  of  your  prominent  members  that  the 
authorities  in  Washington  have  direct  evidence  of  Russian 
money  having  been  paid  to  agitators  during  the  steel  strike, 
and  possibly  the  coal  strike.  We  see  it  right  here  in  St.  Louis, 
and  that  is  why  I  say  that  this  is  something  in  which  we  should 
all  be  vitally  interested. 

Germany  Going  After  Trade 

In  closing,  may  I  give  you  one  or  two  other  instances  of  what 
I  mean?  In  my  own  business  (the  hardware  business),  in 
which  I  am  now  back  again  after  two  years  of  Red  Cross  serv- 
ice, one  of  our  Simmons  Hardware  salesmen  wrote  to  us  less 
than  a  month  ago  that  two  German  salesmen  arrived  in  South 
America,  one  with  12  trunks  and  the  other  with  20  trunks  of 
samples  of  cheap  cutlery  and  tools  and  small  shelf  hardware, 
at  prices  several  times  higher  in  marks  than  before  the  war, 
but  which  when  converted  into  our  money  were  less  than 
American  costs.  These  Germans  guaranteed  delivery  60  days 
after  receipt  of  the  order. 

Plenty  of  German  Money 

I  also  have  letters  from  Rome,  written  to  one  of  the  Chicago 
manufacturing  companies,  saying  that  some  months  ago  they 
had  a  big  riot  over  there,  but  the  Italian  Government  was  pre- 
pared for  it  and  in  48  hours  arrested  4,000  men.  Every  single 
man  had  German  money,  but  not  one  of  them  had  Italian 
money.  There  has  not  been  any  rioting  since,  because  they 
knew  they  could  not  get  away  with  it  because  the  Government 
was  watching  them. 

In  Havana  a  German  ship  arrived  just  20  hours  after  the 
announcement  was  made  in  Washington  that  it  was  now  legal 
to  trade  with  Germany.  That  is  pretty  close  connections.  You 
might  say:  "What  has  that  to  do  with  us?"  It  seems  to  me 
that  it  must  stir  up  our  public  opinion  to  take  the  kind  of  action 
the  American  people  are  dead  sure  to  take  when  they  are 
aroused. 


350         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Agitators  Still  at  Work 

We  could  not  realize  that  the  same  type  of  men,  and  some- 
times the  same  individuals,  who  were  connected  with  the  blow- 
ing up  of  munitions  works  and  the  burning  of  grain  elevators 
and  of  our  spruce  forests  during  the  war  are  today  applying 
their  firebrands  to  the  inflammable  brain  of  the  alien  workmen 
within  our  boundaries,  and  of  those  dissatisfied  American  citi- 
zens who  are  seeking  their  own  personal  aggrandizement,  with- 
out being  willing  to  pay  the  price  of  the  success  which  is  open 
to  every  good  American  under  our  Constitution. 

I  am  not  pessimistic  over  the  situation.  I  have  supreme  con- 
fidence in  the  judgment  and  eventual  action  by  the  American 
people  on  any  big  question,  once' they  are  aroused  to  the  real 
facts  in  the  case.  Therefore,  it  is  your  duty  and  mine,  and  the 
duty  of  every  other  good,  red-blooded  American,  to  let  it  be 
known  in  no  uncertain  way  that  we  stand  for  America  first, 
last  and  all  the  time ;  that  we  shall  refuse  to  be  dominated  by 
any  minority  or  any  class,  regardless  of  who  or  what  they  rep- 
resent; that  we  shall  not  only  ourselves  abide  by  the  majority 
vote  on  the  theory  of  the  greatest  good  for  the  greatest  number, 
but  that  we  shall  insist  upon  all  others  who  avail  themselves  of 
the  privileges  of  American  citizenship  assuming  the  same  obli- 
gations and  maintaining  our  traditions. 

Will  Demand  Americanism 

Let  our  representatives  in  State  and  National  Legislatures 
understand  that  we  will  stand  for  no  dodging  on  this  question, 
and  will  send  to  those  legislative  bodies  only  men  who  are  free 
from  domination  of  any  class  or  organization.  Further  let  it 
be  known  in  no  uncertain  way  that  the  American  people  have 
gone  on  record  against  Bolshevism,  I.  W.  W.  and  other  issues  of 
that  sort,  and  that,  whenever  any  person  attempts  by  speech  or 
teaching  to  destroy  the  Government  of  the  United  States  and 
its  Constitution  by  force,  or  attempts  to  pull  us  down  to  the 
degraded  levels  of  these  European  countries,  America  will 
arise  en  masse  and  demand  the  imprisonment  of  such  men  for 
as  long  as  may  be  necessary  to  protect  our  country  and  our 
ideals  of  democracy  and  freedom;  and,  furthermore,  if  those 
men  be  aliens  and  not  our  citizens,  that  they  shall  be  sent  back 
home,  where  they  belong. 


"THE  RULING  PASSION"  351 

"THE  RULING  PASSION" 

Address  by  ALLEN  WALKER,  of  New  York 

I  come  before  you  today,  Mr.  Chairman  and  Gentlemen,  not 
as  a  banker,  but  as  a  citizen  who  happens  to  have  taken  oppor- 
tunity for  some  special  study  of  industrial  and  social  relations 
over  the  world  during  the  past  few  years  and  as  one  who  had 
enjoyed  some  participation  in  the  organization  of  a  construc- 
tive national  movement  for  the  development  of  better  general 
conditions  along  these  particular  lines.  It  is  in  this  capacity 
that  I  was  asked  to  address  you,  and  I  do  so  gladly,  appreciative 
of  the  chance  to  meet  with  a  body  of  men  whose  efforts  are  to 
search  their  own  industry  for  such  co-operative  elements  as 
may  assist  the  national  welfare  in  the  same  helpful  direction. 

Not  many  weeks  ago  my  wife  and  I  were  traveling  from 
Boston  with  friends — a  business  man  and  his  wife — and  while 
in  the  smoking  compartment  my  friend  and  I  continued  a  dis- 
cussion, which  had  started  during  luncheon,  on  prevailing 
social  and  economic  conditions. 

Our  conversation  was  interrupted  by  a  gentleman  who  sat 
nearby,  who  said  he  was  a  fireman  on  the  New  Haven  and 
Hartford  Railroad.  He  remarked  that  most  of  the  trouble 
today  was  due  to  the  profiteers — the  capitalists,  he  explained — 
and  that  a  reduction  in  the  cost  of  living  was  the  primary  need. 
"As  a  fireman,"  he  said,  "I  earn  only  $240  a  month  and  I  have 
a  family  and  three  children  to  keep.  I  simply  cannot  make 
ends  meet." 

"No,"  answered  my  friend,  "I  suppose  not.  But  I  notice  you 
are  the  only  man  in  this  compartment  who  is  wearing  a  silk 
shirt  and  silk  hose." 

"Well,"  replied  the  fireman,  "have  I  not  the  right  to  wear 
silk  if  I  wish — the  same  right  that  any  man  in  Wall  Street 
has?" 

"Exactly,"  was  the  reply,  "but  I  would  ask  you,  very  respect- 
fully, if  you  know  any  of  the  men  whose  wealth  you  now  covet 
who  ever  attempted  to  wear  silk  underwear  when  they  were 
earning  $240  a  month  ?" 


352         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

There  was  no  further  argument.  On  the  very  same  journey 
there  was  some  hitch  in  the  traffic  department  of  the  railroad 
and  our  train  was  switched  back  into  the  Providence  yards  for 
a  time.  While  the  train  was  at  a  standstill  in  the  yard,  my 
friend  and  I  walked  toward  the  depot,  the  ladies  taking  a  little 
fresh  air  opposite  a  line  of  Pullman  cars  drawn  up  nearby. 
Alongside  each  Pullman  car  stools  were  set,  and  upon  each 
stool  was  a  scrubwoman  busily  employed  in  cleaning  the  car 
windows. 

The  ladies,  interested  in  our  previous  discussion,  walked 
along  the  line  of  stools  and  indulged  in  a  little  visit  of  inspec- 
tion on  their  own  account.  When  we  were  together  in  the  car 
again  one  of  the  ladies  said :  "Apropos  of  what  we  were  dis- 
cussing at  lunch ;  when  we  stood  opposite  that  window-cleaning 
scene  we  carefully  noted  that  we  were  the  only  women  in  sight 
not  wearing  silk  stockings." 

Wasteful  Public 

A  Boston  hosiery  manufacturer  recently  informed  me  that 
when  the  Council  of  National  Defense  a  few  months  ago  issued 
its  proclamation  concerning  the  need  for  minimum  spending 
and  maximum  production,  he  (the  manufacturer)  adopted  the 
expedient  of  raising  the  price  on  his  silk  and  lowering  the  price 
on  his  cotton  hose.  He  thought  this  was  a  patriotic  thing  to 
do  and  would  help  people  of  moderate  means.  To  his  astonish- 
ment, during  the  succeeding  three  months  he  sold  25  per  cent, 
more  silk  hose  than  before  and  about  20  per  cent,  less  cotton. 

Is  there  not  some  answer  to  the  question  of  the  hour  in  this 
known  condition  of  things?  I  think  if  I  were  asked  to  lay  out 
a  programme  of  sermons  to  be  preached  from  every  church 
pulpit  for  the  ensuing  year  I  should  advocate  a  series  developed 
around  the  menace  of  the  present-day  money  madness. 

The  ruling  passion  is  extravagance,  the  arch  enemy  of  thrift, 
supplemented  by  a  very  common  determination  to  do  as  little 
as  possible  for  as  much  as  it  is  possible  to  get,  by  fair  or  unfair 
means.  The  basic  sin  at  the  bottom  of  all  our  social  unrest  is 
that  same  covetousness  against  which  we  are  warned  in  the 
Tenth  Commandment. 

I  was  keenly  interested  in  the  preachment  of  a  man  who  not 
long  ago  addressed  a  large  gathering  of  steel  employees  in 


"THE  RULING  PASSION"  355 

Gary,  Ind.  He  described  himself  as  a  "converted  Socialist," 
naively  remarking-  that  he  had  read  himself  into  Socialism  and 
thought  himself  out  of  it.  He  began  by  referring  to  a  lecturer — 
a  long-haired  gentleman — who  had  preceded  him  by  a  few  days 
and  who  had  informed  the  same  crowd  that  1  per  cent,  of  the 
people  owned  all  the  wealth  of  the  country  and  that  since  labor 
produced  90  per  cent,  of  the  country's  wealth  labor  should 
"have  its  due." 

The  Converted  Socialist 

"Now,"  said  the  convert,  "I  am  going  to  prove  to  you  a  little 
later  that  those  statements  are  untrue,  but  in  the  meantime 
content  myself  by  stating  that  even  if  they  were  true  they  need 
not  cause  us  half  the  worry  the  Socialist  preacher  hopes  they 
will  cause  you.  Have  you  ever  stopped  to  analyze  things  for 
yourselves  ?  Do  you  know  that  I  have  worked  out — and  chal- 
lenge disproof  of  my  statement — that  if  you  should  confiscate 
all  the  wealth  of  the  people  in  this  country  who  now  earn  more 
than  $10,000  a  year  and  distribute  it  equitably  over  all  the  rest 
you  could  increase  the  income  of  the  beneficiaries  by  just  10 
per  cent. — and  no  more.  That  is,  the  man  now  getting  $2,000 
a  year  would  then  receive  $2,200  and  so  on.  And  in  the  mean- 
time you  would  have  destroyed  all  industry.  Is  it  worth  while  ? 

"And  speaking  about  participation  in  management,  did  you 
ever  stop  to  think  that  1  per  cent,  of  the  people  supply  all  the 
music  of  the  world,  all  the  art  of  the  world  and  all  the  litera- 
ture of  the  world.  But  Providence  has  somehow  provided  that 
we,  none  of  us,  can  keep  altogether  to  ourselves  any  of  the  talents 
with  which  we  are  endowed.  You  never  heard  of  an  opera 
singer  who  was  content  to  sing  in  a  cellar,  nor  of  an  artist  who 
hung  his  creations  in  an  attic.  No,  they  all  must  needs  discover 
the  largest  possible  audience  for  the  consumption  of  what  they 
have  to  give  to  the  world.  And,  curiously  enough,  no  one  envies 
them  their  monopoly  of  their  talents,  save  the  Russian  Soviet 
leaders,  who,  we  are  told,  butchered  their  leading  musicians  and 
painters  in  Moscow  because  of  their  'plutocratic  tendencies/ 

"It  is  the  same  with  those  who,  by  dint  of  striving,  have 
accumulated  large  material  possessions.  John  D.  Rockefeller 
cannot  add  a  dollar  to  his  income  next  year  which  will  enable 
him  to  wear  two  coats  or  two  collars  at  a  time ;  nor  will,  I  ven- 


354         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ture  to  add,  make  him  one  whit  the  happier.  Every  new  penny 
he  turns  must  go  into  industry  to  create  new  opportunities  for 
you  and  for  me. 

"Managerial  genius  is  just  as  rare  as  artistic  genius,  as  any 
employment  agency  can  tell  you." 

One  member  of  the  audience  did  not  care  for  this  sort  of 
reasoning.  "That  is  all  very  well,"  he  interrupted.  "I  can't 
argue  against  you,  but  all  I  know  is  that  the  last  time  I  was  in 
New  York — I  went  down  there  riding  under  a  train — I  saw 
men  and  women  leaving  their  mansions  on  Fifth  Avenue  and 
riding  in  their  limousines,  with  lapdogs  and  all,  while  we  here 
slave  eight  hours  a  day  to  make  ends  meet.  And  I  tell  you  it 
ain't  fair." 

"Go  and  Do  Likewise" 

Loud  cheers  followed  this  outburst,  but,  nothing  daunted,  the 
speaker  shot  back  this  at  the  gentleman  who  had  elicited  the 
applause :  "Well,  all  I  can  say  to  you,  sir,  is  this :  'Go  thou 
and  do  likewise  in  the  only  country  on  God's  earth  where  the 
man  who  digs  the  drains  today  may  ride  in  his  own  limousine 
tomorrow.  No  more  than  you  have  I  any  use  for  a  lavish  and 
foolish  display  of  wealth,  but  I  challenge  you  to  point  to  any 
one  of  the  men  whose  position  you  envy  today  who  ever  got 
where  he  is  by  refusing  to  work  more  than  eight  hours  a  day/  " 

With  this  simple,  straight  talk — a  lesson  in  elementary  eco- 
nomics, indeed — the  speaker  continued,  and  in  thirty  minutes 
he  was  being  cheered  just  as  loudly  as  the  gentleman  who  had 
heckled  him.  It  was  the  first  time  these  people  had  received 
the  gospel  of  truth  from  a  source  which  they  regarded  as 
acceptable  and  which  they  felt  they  need  not  discount  in 
advance. 

Time  to  Awaken 

Here,  then,  surely,  is  one  thing  that  is  wrong.  We  business 
men  have  each  of  us  been  so  busy  in  our  exclusive  corners  as  to 
be  unmindful  of  the  things  which  underlie  the  very  foundations 
of  the  national  prosperity,  which  means  the  national  welfare 
and  our  welfare,  and  of  that  of  our  children  and  our  children's 
children.  Too  long  have  we  failed  to  realize  that  what  kind  of 
a  country  this  is  going  to  be  to  live  in  ten  years  hence  is  much 


"THE  RULING  PASSION"  355 

more  important  to  each  and  all  of  us  than  the  volume  of  our 
profits  for  today  or  what  kind  of  contract  we  are  going  to  sign 
tomorrow.  We  are  awakening  to  it  now,  in  a  time  of  national 
crisis,  and  some  there  are  who  impatiently  would  press  those  in 
authority  to  turn  about  and  find  an  overnight  remedy.  What 
have  we  business  men  done  to  disseminate  economic  truth  as 
against  the  prevailing  abundance  of  fallacy  ? 

Employes  Need  Education 

A  factory  worker  the  other  day  approached  his  manager  and 
said :  "Agitators  come  to  our  union  meetings  and  say  a  lot  of 
•things  that  most  of  us  know  are  not  true,  but  nobody  gets  up 
to  refute  them." 

"Why  don't  you  stand  up  and  talk  back  to  them?"  asked  the 
manager. 

"What  can  I  say?"  the  worker  asked.  "Everyone  knows  that 
relations  between  employers  and  employees  generally  over  the 
country  are  not  what  they  should  be.  These  agitators  say  they 
have  a  remedy.  I  and  my  pals  know  that  their  remedy  is 
rotten,  but  we  have  no  alternative  to  offer  and  until  we  have 
one  we  cannot  talk  back  with  much  hope  of  winning  the  argu- 
ment or  making  any  impression  on  the  meeting." 

That  statement  is  very  much  to  the  point.  Very  definite 
effort  is  required  to  put  simple  economic  truth  into  the  minds 
and  mouths  of  every  factory  worker  so  that  they  shall  not  feel 
compelled  to  sit  silent  and  unaffected  while  knowing  in  their 
own  minds  that  the  arguments  of  the  radical  persuaders  are 
unsound.  These  things  that  are  wrong  must  be  set  right,  and 
they  can  be  set  right  if  the  motive  and  the  will  to  correct  them 
be  strong  enough. 

The  task  is  everybody's  job  and  does  not  belong  in  the  cate- 
gory of  Government  action  alone,  nor  in  the  sphere  of  any  par- 
ticular authority  detached  from  all  right-thinking  citizens  them- 
selves. It  is  becoming  rather  plain,  too — is  it  not? — that  great 
solutions  cannot  be  found  by  reckless  assumptions  as  to  specific 
remedies  regarded  as  being  capable  of  application  overnight. 
It  is  plain,  also,  that  social  diseases 'cannot  be  cured  by  negotia- 
tion nor  conference  where  there  is  no  accepted  declaration  of 
principles  upon  which  to  base  co-operative  action. 


356         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Real  and  Not  Imaginary  Danger 

We  must  not  accept  any  hasty  analysis  as  correct  nor  assume 
that  there  is  any  quick  or  simple  solution  ready  at  hand.  With 
those  who  choose  to  dispose  of  consideration  of  the  present 
industrial  unrest  as  "after-the-war"  reaction,  assuming  that 
the  trouble  may  soon  blow  over  if  we  sit  still  and  do  nothing 
about  it,  I  have  very  little  patience.  As  a  matter  of  fact,  the 
cataclysm  of  social  change  in  Europe  should  have  no  parallel 
here.  There,  it  is  the  result  of  the  long  cumulation  of  social 
and  political  wrongs.  It  is  no  sudden  aftermath  of  war.  Cer- 
tain forces  were  projected  into  actual  realization  by  the  collapse 
of  the  war,  the  breakdown  in  the  political  institutions  that  had 
preceded  it,  and  by  the  misery  which  had  flowed  from  it.  We 
have  not  the  vivid  class  and  economic  conditions  of  Europe,  nor 
have  we  the  depths  of  misery  out  of  which  these  matters  can 
crystallize.  We  have  a  larger  social  conscience,  and  our  soil 
would  offer  little  fertility  to  these  new  growths  were  it  not  for 
the  persistent  irritation  of  those  who  have  presumed  upon  our 
hospitality  to  the  extent  of  showing  us  how  to  improve  upon 
our  liberal  institutions  and  processes  of  orderly  government 
here. 

The  Parlor  Socialist 

The  gentlemen  who  are  trying  to  teach  us  a  new  science  of 
government  are  being  very  actively  assisted  by  quite  a  number 
of  faddists — "parlor  Socialists"  they  are  called — with  whom  it 
is  regarded  as  quite  the  proper  and  f  a'shionable  thing  to  com- 
miserate with  the  long-haired  quacks  who  dispense  academic 
anarchy  in  disguise.  I  know  of  quite  a  number  of  worthy  and 
thoroughly  well-meaning  men  and  women  in  New  York  who  are 
being  fooled  to  death  and  bled  by  these  new  species  of  reformers 
to  support  their  cause  camouflaged  by  devious  outward  coat- 
ings of  harmless  sociological  preachments. 

I  have  been  a  member  of  a  committee  which  conducted  inves- 
tigations over  a  period  of  seven  months  along  these  lines,  and 
we  found  that  several  charitably  disposed  men  and  women  of 
prominence  were  regularly  contributing  to  radical  organiza- 
tions who  would  even  go  so  far  as  to  procure  specific  appropria- 
tions of  money  upon  the  submission  of  certain  propaganda  for 
wide  dissemination,  and  that  after  the  appropriation  was 


"THE  RULING  PASSION"  357 

agreed  to  and  the  check  received,  the  executive  members  of  the 
organization  would  go  to  work  and  prepare  and  distribute  an 
entirely  different  kind  of  propaganda  and  for  entirely  different 
purposes  than  those  conceived  in  conference  with  the  good 
angels  who  were  putting  up  the  money.  What  these  faddists 
and  all  those  who  tolerate  radicalism  fail  to  understand  is  that 
the  real  division  of  people  actively  connected  with  the  labor 
problem  is  not  between  workers  and  employers,  but  is  between 
the  constructive  people  and  the  destroyers.  These  latter  people 
do  not  want  peace.  They  work  independently  or  collectively, 
as  may  be  convenient,  inside  of  existing  labor  organizations  or 
outside  of  them ;  in  the  parlor,  in  the  street,  in  the  factory  or 
on  the  farm.  Their  job  is  to  increase  the  prevailing  social  dis- 
eases until  the  existing  order  falls  over.  Their  job  is  to  foster, 
not  to  eliminate,  class  warfare. 

A  Simple  Answer 

I  believe  the  answer  to  all  this  demagoguery  is  surprisingly 
simple  and  that  the  platform  upon  which  American  citizens 
may  be  bidden  to  stand  as  they  face  the  future  will  consist  of 
some  form  of  reassertion  of  the  old  ideals  of  equality  of  oppor- 
tunity and  individual  freedom  established  in  our  original 
Constitution. 

Mark  you,  I  am  not  altogether  in  sympathy  with  those  who 
cry  "back  to  the  Constitution,"  and  offer  this  as  the  curative 
slogan  upon  which  to  base  the  activity  of  patriots.  I  am  very 
doubtful  if  the  American  people,  at  this  stage  of  our  history, 
can  be  enthused  by  being  asked  to  "go  back"  to  anything,  even 
though  it  be  true  that  the  merit  of  our  institutions  has  stood 
the  test  of  150  years  in  a  fairly  successful  endeavor  to  provide 
a  square  deal  in  citizenship.  Rather  am  I  encouraged  to  feel 
that  the  eyes  of  our  people  are  turned  forward  and  that  they 
are  in  the  mood  to  subscribe  to  the  belief  that  by  looking  facts 
in  the  face  and  by  the  right  kind  of  co-operative  effort  we  may 
develop  an  even  better  America  than  we  have  ever  known. 
There  are  grievances  legitimate  enough  requiring  the  attention 
of  thoughtful  men  and  a  determination  to  eradicate  them  in  a 
truly  sympathetic  spirit.  The  difficulty  is  to  persuade  some  of 
our  theorists  that  you  can  never  effectively  remedy  what  is 
wrong  in  any  kind  of  organization  by  a  series  of  violent  jerks. 


358         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  can  be  done  only  by  a  gradual  strengthening  of  the  weak 
spots,  with  proper  regard  for  the  smooth  processes  of  law  and 
order. 

Economic  Problems 

These  problems  of  social  hygiene  and  industrial  relations  no 
longer  are  to  be  regarded  as  problems  for  the  exclusive  atten- 
tion of  large  employers  of  labor.  They  are  not  mere  employ- 
ment problems  at  all;  they  never  were.  They  are  broad  eco- 
nomic problems  in  which  every  American  citizen  has  a  personal 
interest  and  a  patriotic  duty  to  perform,  for  patriotism  is  not 
a  cloak  of  war  time,  to  be  discarded  when  peace  comes  to  us 
again.  As  a  matter  of  fact,  I  have,  in  my  observations  around 
the  world,  seen  much  harm  done  by  large  employment  interests, 
who,  thoughtless  of  the  common  good,  have  endeavored  to  settle 
their  problems  on  the  basis  of  individual  expediency  rather 
than  upon  a  basis  of  principle.  The  sacrifice  of  principle  in 
the  interests  of  expediency  is  at  the  bottom  of  90  per  cent,  of 
our  troubles,  both  political,  social  and  economic.  We  all  with- 
out protest  have  seen  the  rights  of  individuals  sacrificed  to  the 
threats  of  a  class.  We  have  seen  those  who  represent  the  people 
yield  their  own  judgment  to  the  terrors  of  organized  proscrip- 
tion; we  have  witnessed  cowardice  in  the  presence  of  blatant 
minorities  and  have  gone  about  our  business  believing  that  it 
was  some  one's  else  job  to  right  the  wrong.  Are  we  content 
with  our  lot  now?  I  believe  all  right-thinking  men  in  America 
today  are  aroused  to  the  need  for  a  declaration  of  principles  by 
which  they  shall  stand,  come  weal,  come  woe,  believing  that  if 
the  advocates  of  fallacious  doctrines  have  organized  for  the 
shock,  they,  standing  for  the  preservation  of  our  institutions, 
had  better  take  their  medicine  now  and  be  done  with  it.  That 
does  not  mean  that  they  seek  any  test  of  strength  with  those 
whose  success  depends  upon  the  extent  to  which  they  can  foster 
class  warfare,  nor  that  they  have  any  other  than  a  constructive 
programme  upon  which  to  build  a  campaign  of  educational 
effort  calculated  to  offset  the  fallacies  now  being  preached  by 
"long-haired  men  and  short-haired  women,"  from  parlor,  pulpit, 
soap  box  and  seminary.  As  suggesting  some  of  the  funda- 
mentals by  which  all  straight-thinking  Americans  might  agree 
to  stand,  I  would  offer  the  following : 


"THE  RULING  PASSION"  359 

Sound  Business  Suggestions 

1.  That  the  national  interest  cannot  be  served  by  attempted 
compromise  with  or  placation  of  the  advocates  of  what  is 
economically  unsound ; 

2.  That  in  the  category  of  "unsound  doctrine"  should  be 
placed  every  proposal  which  challenges  individual  free- 
dom and  the  rights  of  property  granted  by  the  Constitu- 
tion of  the  United  States; 

3.  That  every  citizen  interested  in  furthering  the  cause  of 
industrial  peace  should  strive  for  the  elimination  of  "class 
warfare"  as  being  the  basic  evil  of  the  hour; 

4.  That  the  duty  to  observe  contracts  entered  into  in  good 
faith  is  at  all  times  superior  to  the  right  to  strike ; 

5.  That  the  inviolability  of  the  contract  or  agreement  between 
employer  and  employee  should  be  regarded  as  a  solemn 
covenant,  and  that  any  willful  breach  thereof  on  either 
side  should  be  regarded  as  a  violation  of  American  honor 
and  citizenship ; 

6.  That  employers  everywhere  should  earnestly  seek  to  do 
away  with  the  cause  of  the  legitimate  grievances  of  em- 
ployees.   Those  who  cannot  distinguish  between  the  legiti- 
mate and  the  fallacious  can  be  assisted  in  their  diagnosis. 
This  may  be  accepted  as  sound  because  no  cause  ever 
thrived  enduringly  upon  illegitimate  grounds ; 

7.  That  the  interests  of  none  are  served  permanently  by  the 
stopping  of  production  or  by  any  interference  with  the 
machinery   which   moves    for   the   maintenance   of   the 
national  prosperity; 

8.  That  public  sentiment  should  be  developed  to  insist  upon 
the  maintenance  of  law  and  order  regardless  of  all  indus- 
trial differences  anywhere  and  everywhere,  and  that  all 
organized  effort  shall  be  accorded  its  victories  through 
orderly  processes,  and  none  other; 

9.  And  lastly — and  above  all — that  no  organization  of  any 
kind  shall  be  permitted  to  develop,  nor  even  to  exist, 
which  in  political  power  or  influence  may  be  bigger  than 
the  Government  of  the  United  States. 

There  is  need  of  a  general  recognition  of  the  fact  that  there 
is  no  such  thing  as  a  labor  and  capital  problem,  one  distinct 


360         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

from  the  other.  It  is  all  a  production  problem,  and  a  full  day's 
work  for  a  full  day's  pay  should  be  as  much  a  part  of  the 
patriot's  creed — remembering  our  friendly  competition  v/ith 
the  rest  of  the  world — as  is  belief  and  pride  in  Old  Glory. 

Another  False  Theory 

I  have  heard  it  said  by  some  of  the  advocates  of  government 
ownership  of  public  utilities  and  government  control  of  natural 
resources  that  one  of  the  great  advantages  of  ownership  and 
operation  by  the  State  would  be  a  better  relationship  between 
labor  and  the  community,  as  against  the  existing  relationship 
between  labor  and  capital.  This  is  another  of  the  assumptions 
based  upon  theoretical  concept.  In  reference  thereto,  I  would 
point  to  the  situation  in  Great  Britain,  where  they  recently 
have  had  one  of  the  most  dangerous  labor  disputes  with  which 
the  country  was  ever  confronted,  and  it  was  a  dispute  between 
labor  and  the  government — which  means  between  labor  and 
the  community  as  a  whole.  Premier  Lloyd  George  made  refer- 
ence to  this  very  fact  in  his  recent  refusal — when  he  replied  to 
delegates  from  the  Miners'  Federation  of  Great  Britain — to 
support  any  policy  of  nationalization  of  the  mines. 

I  believe  there  is  a  good  deal  of  misunderstanding  and  mis- 
conception in  the  country  today  regarding  what  the  people  as  a 
whole  believe  and  what  the  people  want.  We  have  heard  some 
statements  made  with  considerable  emphasis  as  to  the  deter- 
mination of  certain  industrialists  to  "break  down  the  organized 
Jabor  movement."  I  for  one  do  not  believe  that.  I  think  I  may 
say  that  my  contact  with  industrial  leaders  up  and  down  the 
country  during  the  past  few  years — as  a  mere  matter  of  oppor- 
tunity— has  been  as  comprehensive  and  frequent  as  that  of  any 
individual  in  the  United  States,  and  I  can  say  without  hesita- 
tion that  I  have  never  yet  met  a  business  man  who  gave  utter- 
ance to  any  such  hope  or  desire.  Of  course,  there  are  radicals 
and  reactionaries  in  every  branch  of  society,  but  I  have  yet  to 
find  the  industrialist  who  objects  to  reasonable  combinations 
of  wage  earners  organized  for  the  purpose  of  improving  the 
conditions  of  labor.  I  have,  however,  heard  many  objections — 
and  I  think  we  shall  hear  them  still  more  positively  and  more 
generally  stated  during  the  next  few  months — to  the  right  of 
aggregations  of  any  class  to  win  power  to  force  political  issues 


"THE  RULING  PASSION"  361 

and,  in  the  employment  of  that  power,  jeopardize  the  rights  of 
other  citizens. 

"Rights  and  Duties" 

It  is  a  fallacious  idea  that  there  is  any  distinction  between 
the  citizen  rights  of  wage-earners  and  others  in  the  United 
States.  And  I  think  we  might  wish  that  there  was  less  fre- 
quent omission  of  any  mention  of  the  citizen  duties  of  wage- 
earners  and  everybody  else.  Ordinary  citizens  generally  under- 
stand that  they  must  "accept"  the  law  from  the  courts  and 
judges,  and  I  think  there  is  fairly  positive  objection  to  the  idea 
that  there  shall  be  any  special  class  of  citizens  who  may  choose 
which  laws  they  will  obey  and  which  they  will  defy. 

Attention  has  been  drawn  to  the  fact  that  the  American 
Federation  of  Labor  and  the  Railroad  Brotherhoods  have 
united  in  a  call  for  a  conference  to  consider  "the  foundations  of 
the  structure"  of  the  labor  movement  in  the  United  States.  The 
call  says  that  its  "fundamental  principles"  are  threatened  and 
that  there  is  necessity  for  a  programme  which  will  protect  the 
"citizen  rights  of  wage -earners."  The  proposed  new  law  which 
provoked  this  call  to  conference  as  yet  is  merely  a  proposal  that 
labor  connected  with  railroads  shall  receive  specific  privileges 
in  conditions  of  employment  in  consideration  of  something  like 
an  enlistment  which  shall  prevent  striking  without  punishment 
for  violation  of  contract.  I  suspect  that  there  will  be  little 
public  support  for  a  movement  which  proposes  to  commit  labor 
to  something  like  a  rebellion  to  enforce  the  declaration  that 
nothing  can  be  enacted  which  shall  in  any  way  limit  labor's 
right  to  strike  at  any  time  for  any  cause. 

If  that  seems  too  strong  an  interpretation  to  put  upon  the 
stated  assumptions  of  what  formerly  was  regarded  as  conser- 
vative labor  leadership  I  would  point  out  that  within  the  past 
month  Mr.  Gompers  has  repeatedly  declared  that  wage-earners 
would  not  even  accept  compulsory  arbitration  and  would  not 
obey  anti-strike  laws  even  if  declared  constitutional  by  the 
Supreme  Court  of  the  United  States.  And  Mr.  Plumb  promised 
us  an  industrial  revolution  if  the  plan  was  enacted. 

Labor  Degrades  Congress 

Year  after  year  labor  has  caused  Congress  to  degrade  itself 
by  forbidding  funds  for  the  prosecution  of  lawbreakers  to  be 


362         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

used  against  unlawful  acts  performed  by  special  classes.  At 
the  same  convention  which  ordered  the  coal  strike  there  was 
presented  a  report  rejecting  the  doctrine  that  unions  and  their 
officers  can  be  held  responsible  for  violence  against  the  opera- 
tors and  workers  of  non-union  mines.  Thus  is  the  citizen's 
right  to  work  brought  into  conflict  with  the  citizen's  right  to 
strike — a  conflict  of  humanities  which  needs  considerable  ad- 
justment before  public  sentiment  and  sympathy  may  be  won 
in  support  of  those  who  claim  that  their  purposes  are  merely 
the  lawful  betterment  of  conditions  under  which  they  exist. 

In  this  conection,  however,  I  think  it  wise  to  suggest  that  we 
do  not  forget  that  the  real  aim  of  all  legislation  and  all  organ- 
ized effort,  of  any  and  every  kind,  should  be  not  to  prohibit 
strikes  but  to  prevent  them.  And  no  wise  employer  is  losing 
sight  of  the  fact  that  the  first  and  surest  remedy  after  all — so 
far  as  his  duty  is  concerned — is  to  eliminate  the  desire  to  strike 
by  doing  all  that  lies  in  his  power  to  make  working  conditions 
what  they  should  be. 

Thrift  and  Production 

Is  it  altogether  useless  to  try  and  establish  the  universal 
recognition  for  maximum  thrift  and  maximum  production  at 
this  time?  If  it  be  not  possible  to  bring  about  industrial  tran- 
quility  otherwise,  I  should  like  to  see  emanate  from  some 
authoritative  source  a  serious  proposal  for  a  twelve-months' 
armistice  between  accredited  representatives  of  labor  and 
capital  with  a  commission  in  each  State  consisting  of  one  rep- 
resentative of  labor,  one  representative  of  capital  and  manage- 
ment, one  representative  appointed  by  the  State  government 
and  two  appointed  by  some  national  organization  which  has 
won  public  confidence.  The  representatives  appointed  by  such 
an  organization  should  be  neither  capitalists  nor  laboring  men, 
but  preferentially  educationists  or  men  having  no  holdings  in 
industrial  plants.  The  same  kind  of  a  commission  might  be 
appointed  as  a  national  body  with  authority  to  act  as  the  last 
court  of  appeal.  Such  an  armistice  should  be  real — no  lock- 
outs and  no  strikes  during  that  time.  The  same  wages  as  now 
prevailing  should  be  maintained,  but  permitted  to  vary  in  each 
community  based  upon  fluctuations  in  the  cost  of  living.  Stand- 
ardization in  wages  and  ensuing  adjustments  could  be  decided 


"THE  RULING  PASSION"  363 

by  the  State  commissions,  with  the  national  body  as  the  final 
arbiter,  each  side  pledging  itself  in  advance  to  abide  by  the 
verdict  of  the  national  commission.  Then  I  would  like  to  see 
during  this  period  of  twelve  months  a  national  propaganda — 
as  comprehensive,  effective  and  as  intensive  as  the  Liberty 
Loan  or  Red  Cross  campaigns — in  behalf  of  thrift  and  produc- 
tion, a  real  educational  effort  whereby  in  the  simplest  language 
every  citizen  would  be  made  to  understand  why  the  observance 
of  these  maxims  primarily  would  be  in  his  and  her  own  interest, 
and  consequently  in  behalf  of  the  national  welfare. 

Must  Work  Longer — Not  Less 

We  cannot  save  and  find  money  to  invest  in  securities  to  help 
reconstruct  the  world  and  simultaneously  spend  our  earnings 
in  luxuries  which  are  beyond  the  means  of  the  prudent  and 
thrifty.  We  cannot  listen  to  the  demand  for  six-hour  days  and 
five-day  weeks  and  still  hope  to  produce  the  materials  even  for 
our  own  needs,  let  alone  what  the  world  requires  of  us.  Neutral 
countries  such  as  Holland,  are  sending  raw  materials  into  Ger- 
many, with  a  pledged  lien  on  the  finished  product,  in  response 
to  the  German  request  that  she  shall  have  an  opportunity  to 
employ  her  people  and  start  her  factories  going.  It  is  said 
that  the  German  workers  are  pledging  themselves,  through 
their  local  organizations,  to  be  satisfied  with  a  ten-hour  day, 
and  that  in  many  places  they  are  urging  a  twelve  and  sixteen- 
hour  day  until  the  peak  of  reconstruction  be  reached.  If  this 
be  true,  if  Germany  does  this  and  we  are  content  to  gradually 
shorten  our  working  hours  and  automatically  restrict  our  pro- 
duction thereby  who  in  the  last  analysis  will  have  won  the  war  ? 
Did  you  notice  the  recent  statement  of  M.  A.  Merriham,  secre- 
tary of  the  Metal  Workers'  Union,  who  created  a  sensation  in 
Lyons,  France,  the  other  day  by  diagnosing  the  wave  of  im- 
morality which  threatens  to  submerge  all  classes  of  society,  the 
working  class  more  than  all  others. 

Socialist  Ridicules  Six-Hour  Day 

M.  Merriham,  a  Socialist,  who  conferred  with  the  German 
Socialists  at  Zinnerwald,  Switzerland,  during  the  war,  and  for- 
merly one  of  the  most  aggressive  labor  leaders  in  France,  ridi- 
culed the  pretensions  of  extremists  of  labor  organizations  who 


364         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

talked  of  such  plans  as  a  six-hour  day.  He  said  that  what 
organized  labor  needed  was  to  get  to  work.  "You  talk  of  a 
revolutionary  situation,"  he  said,  "but  left  to  itself  the  prole- 
tariat could  accomplish  nothing.  The  war  has  sharpened  all 
appetites  and  produced  all  sorts  of  covetousness  in  all  circles, 
even  among  the  workers.  Idealism  has  foundered  under  base 
material  preoccupation.  Money  is  everything.  No  one  wants 
anything  but  money.  We  must  save  the  working  classes  from 
that  wave  of  immorality." 

M.  Merriham's  speech  made  a  deep  impression  on  the  dele- 
gates and  he  received  a  great  ovation  as  he  left  the  platform. 
The  laboring  people  of  the  world  may  need  more  money  and 
better  conditions.  But  the  way  to  get  these  things  is  not  to  do 
poorer  work  and  less  of  it.  There  never  was  a  time  in  history 
when  the  workers,  from  the  girls  in  the  kitchen  to  skilled  pro- 
ducers in  the  factories,  produced  so  little  and  asked  so  much  as 
right  now.  I  am  a  worker  myself  and  I  have  never  seen  any 
intelligent  hope  of  getting  a  raise  in  salary  by  making  my  out- 
put less  and  punker  than  it  now  is. 

"Save  and  Produce"  Slogan 

No  thoughtful  American  industrialist  has  ever  quarreled 
with  high  wages;  high,  let  us  say,  in  comparison  with  wages 
paid  for  similar  work  in  other  parts  of  the  world.  For  many 
years  the  wages  paid  to  American  railroad  men  have  been  con- 
siderably higher  than  those  paid  to  railroad  employees  any- 
where else  on  the  face  of  the  globe,  yet  we  have  been  able  to 
carry  a  ton  of  freight  per  mile  cheaper  than  the  railroads  of 
any  other  country.  It  is  the  tendency  to  decrease  production 
that  the  patriotic  American  citizen  quarrels  with  today.  How- 
ever, many  and  whatever  be  the  theories  offered  for  the  solu- 
tion of  the  vexing  problems  facing  us  today,  I  hold  that  there 
are  two  maxims  which  if  universally  and  effectively  applied 
will  solve  most  of  our  difficulties  both  here  and  in  every  other 
part  of  the  world.  They  may  be  embraced  under  the  two  words 
"save"  and  "produce,"  and  above  all,  in  God's  name,  let  us 
produce! 


THE  RED  MENACE  365 


THE  RED  MENACE 

Address  by  DR.  CHARLES  W.  GORDON  (Ralph  Connor), 
Winnipeg,  Manitoba 

It  was  only  two  days  ago,  while  attending  another  congress 
in  the  city  of  Pittsburgh,  a  congress  on  Good  Citizenship,  that 
I  received  a  telegram  from  a  gentleman  in  Winnipeg  advising 
me  that  it  was  very  important  that  I  should  come  here  to  St. 
Louis  and  attend  this  Mining  Congress,  and  give  such  infor- 
mation as  I  could  to  you  gathered  here,  among  other  things, 
concerning  the  late  Winnipeg  strike.  If  I  could  have  escaped 
that  responsibility,  I  should  have  done  so,  but  knowing  that  my 
friend  himself  could  not  be  here,  and  being  in  the  neighbor- 
hood (because  I  believe  Pittsburgh  is  not  so  very  far  away),  I 
thought  I  might  come  at  least  and  do  my  best,  but  I  have  not 
my  material  with  me.  I  have  no  authentic  records.  I  have  only 
studied  the  subject  in  a  general  way,  and  I  labor  under  the 
additional  disadvantage  of  not  having  been  present  in  Winni- 
peg during  the  strike,  being  absent  in  England  at  the  time.  I, 
therefore,  must  crave  your  indulgence  if  what  I  give  to  you 
will  be  more  or  less  of  a  general  character,  and  indeed  it  may 
be  somewhat  fragmentary.  If  I  had  had  opportunity,  I  could 
very  easily  have  produced  the  data  which  would  be  necessary 
for  me  to  support  anything  that  I  have  to  say.  I  shall  be  care- 
ful not  to  make  statements,  of  course,  which  I  believe  cannot 
be  thoroughly  substantiated  by  facts. 

Trouble  Originated  from  Small  Strike 

The  Winnipeg  strike  was  not  intended  as  a  "Red"  movement. 
It  originated  in  a  very  small  way  in  a  quarrel  between  the  metal 
workers  or  some  of  the  metal  workers  in  Winnipeg  with  their 
employers,  involving  dismissal.  The  demand  was  made  for  re- 
instatement and  that  demand  was  refused.  The  specific  labor 
organization  involved  took  up  the  case,  and  failing  to  negotiate 
a  peace,  the  strike  was  adopted  by  the  other  organizations  of 
labor  in  the  city.  Finally  the  Trades  and  Labor  Council,  which 
represents  all  labor  organizations  in  the  city,  called  what  was 


366         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

known  as  a  "general  strike."    And  it  is  that  general  strike  that 
I  have  to  deal  with  tonight. 

Now,  I  shall  ask  you  to  go  back  to  the  years  previous  for  a 
little  history  that  is  necessary  for  the  clear  understanding  of 
the  strike  of  last  May  and  June.  About  a  year  ago  discontent 
arose  among  the  city  employees  of  Winnipeg — the  firemen  and 
policemen  and  other  civic  workers.  They  demanded  the  right 
to  organize,  which  was  granted;  the  further  right  to  affiliate 
with  other  labor  organizations,  which  was  refused,  as  well  as 
better  conditions  of  work  and  better  pay.  A  strike  ensued  on 
the  part  of  these  civic  employees,  but  it  was  soon  allayed  and  a 
kind  of  peace  was  brought  about,  but  the  feelings  aroused  dur- 
ing that  strike  remained  behind,  an  aftermath  of  suspicion  on 
the  one  side  and  resentment  on  the  other.  And  these  feelings 
reappeared  in  the  strike  of  last  summer. 

All  Industry  Tied  Up 

Now,  I  do  not  need  and  I  will  not  go  into  details  of  the 
progress  of  the  strike.  The  strike  was  very  effectively  carried 
on ;  every  industry  was  tied  up,  not  only  industries  of  produc- 
tion, but  every  other  industry  as  well.  The  strike  tied  up  all 
the  civic  employees;  our  telephone  service,  which  is  a  Pro- 
vincial utility,  the  telegraph  service,  the  postoffice,  which  is  a 
Dominion  utility  and  is  controlled  from  Ottawa,  our  Central 
Government.  No  communication  could  go  out  by  letter  or  by 
telegraph  from  the  city  of  Winnipeg  except  by  permission  of 
the  Strike  Committee.  The  necessities  of  life  were  finally  con- 
trolled by  the  Strike  Committee.  A  gentleman  was  calling  on 
me  the  other  day  and,  referring  to  his  experience  during  the 
strike,  told  me  something  like  this : 

He  owns  a  large  block  in  which  he  himself  has  an  office.  He 
discovered  one  morning  that  the  water  would  not  rise  up  to 
his  particular  flat.  There  were  tenants  in  the  block  who  needed 
water  and  none  of  them  could  be  supplied.  He  went  to  the 
Mayor  of  the  city  about  it  and  found  that  he  could  get  no  re- 
dress, the  Mayor  frankly  acknowledging:  "I  cannot  control 
the  water  supply;  you  better  go  and  see  the  Strike  Committee." 
He  went  to  the  Strike  Committee  and  put  his  case,  and  had 
really  to  ask  for  the  use  of  sufficient  water  to  supply  the  tenants 
in  his  building.  This  was  not  immediately  granted,  but  the 
promise  was  made  that  his  request  would  be  considered. 


THE  RED  MENACE  367 

Strikers  Completely  Controlled 

The  climax  was  reached  when  various  public  institutions  and 
various  industries  for  the  supply  of  necessities  of  life  were  car- 
ried on  by  the  express  permission  of  the  Strike  Committee. 
For  instance :  The  bakers'  carts  went  around  the  streets  with 
a  notice  on  them,  "By  special  permission  of  the  Strike  Com- 
mittee"; the  milk  carts  went  around,  "By  permission  of  the 
Strike  Committee" ;  the  theatres  stood  open,  "By  permission  of 
the  Strike  Committee" ;  practically  the  city  government  as  well 
as  the  industries  of  the  city  were  carried  on,  "By  permission  of 
the  Strike  Committee."  It  was  that  more  than  anything  else 
that  brought  matters  to  a  head  and  brought  about  the  destruc- 
tion of  this  movement  which  came  to  be  recognized  as  a 
"Bolshevist  Movement." 

Regaining  Control 

Now,  against  the  "movement"  you  had  these  forces:  The 
Civic  Government;  the  Mayor  and  Council;  the  Provincial 
Government,  which  has  its  headquarters  at  Winnipeg,  and  the 
Dominion  Government,  which  was  interested  in  maintain- 
ing of  law  and  order.  The  steps  taken  to  control  the  situation 
were  these :  When  it  was  discovered  that  the  police  were  taking 
their  orders  practically  from  the  Strike  Committee,  while  still 
wearing  their  uniform  and  patrolling  the  streets,  a  "Citizens 
Committee"  was  formed  and  this  committee  proceeded  to  or- 
ganize a  volunteer  force  of  special  police.  These  were  plain- 
clothes  men.  After  that  the  force  was  increased  by  a  detach- 
ment of  mounted  men,  still  plain-clothes  men.  When  that  was 
found  to  be  insufficient  to  protect  the  city  and  to  guarantee 
security  for  life  and  property  the  militia  units  were  called 
upon — men  who  had  returned  from  the  war,  and  I  am  rather 
sorry  to  say  that  the  call  was  obeyed  with  great  alacrity.  The 
boys  seemed  to  enjoy  a  little  war  at  home  after  being  at  the 
war  in  France.  Lastly,  they  called  upon  a  very  distinguished 
body  of  men — held  in  great  honor  with  us — the  "Royal  North- 
west Mounted  Police." 

Many  Critical  Hours 

It  was  the  combination  of  these  forces  that  made  it  impos- 
sible for  the  Bolshevik  element  to  advance  a  single  step.  There 


368         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

were  very  critical  moments,  however,  in  the  history  of  that 
strike.  For  instance,  that  was  a  very  critical  moment  when  a 
deputation,  which  had  asked  permission  from  the  Provincial 
Government  to  wait  upon  the  Government,  invaded  the  Legis- 
lature, filling  that  building  from  the  floor  to  the  ceiling,  and 
there  made  their  demands  of  the  Premier  of  the  Province  and 
the  members  of  his  Cabinet ;  made  their  demands  in  the  most 
violent,  threatening  and  insulting  way.  That  was  a  very 
critical  moment. 

Bloodshed  Narrowly  Averted 

A  second  time  a  deputation  came  to  the  Government.  One 
of  the  members  of  the  Cabinet,  speaking  to  me  about  this 
the  other  day,  described  that  particular  hour.  "He  felt  like 
a  man  carrying  a  match  into  a  powder-making  concern,"  he 
said.  "I  did  not  know  what  would  happen  any  moment.  Of 
course,"  he  said,  "we  were  ready  for  the  most  extreme  meas- 
ures; the  militia  were  there  with  machine  guns  and  ball  car- 
tridges in  their  rifles,  and  back  of  them  the  mounted  police." 
Fortunately,  nothing  did  occur  at  that  particular  meeting  and 
bloodshed  was-  avoided.  At  last,  however,  after  all  parades 
had  been  forbidden,  the  strikers  announced  that  they  were  to 
have  a  silent  parade  in  protest  against  the  efforts  of  the  Gov- 
ernment and  of  the  civic  authorities  in  refusing  their  demands 
and  suppressing  their  liberty  of  action.  This  parade  was  for- 
bidden and  yet  it  was  announced  that  it  was  to  be  held.  The 
militia  were  ordered  to  hold  themselves  in  readiness ;  the  offi- 
cers went  down  and  saw  the  strike  leaders,  informed  them  of 
the  responsibility  they  were  taking,  how  serious  it  would  be. 
The  officer  in  command  told  me  how  he  was  surprised  and 
pained  to  find  among  the  strike  leaders  one  or  two  members  of 
his  own  battalion  that  had  been  with  him  in  France,  but  there 
were  not  very  many  of  the  returned  soldiers  with  the  strikers. 

Northwest  Mounted  Police 

Next  day  the  clash  did  come ;  some  men  were  killed,  but  the 
streets  were  cleared.  That  was  practically  the  end  of  the 
strike.  The  spectacular  appearance  of  the  Royal  Northwest 
Mounted  Police  and  their  effective  work  was  something  that 
will  never  be  forgotten  by  Winnipegers  who  were  present  to 


THE  RED  MENACE  369 

witness.  Will  you  allow  me  to  digress  here,  to  give  you  a  short 
sketch  of  that  body  of  men,  that  corps  of  policemen  that  for 
the  last  35  years  have  held  the  Northwest  absolutely  quiet  and 
safe,  so  that  property  and  life  have  been  safe  to  the  farthest 
northwest  of  our  Dominion  ?  No  matter  how  wild  the  mining 
camp,  no  matter  how  remote  from  civilization,  life  and  property 
have  been  as  safe  in  these  camps  as  in  the  city  of  Winnipeg  or 
Toronto  or  Montreal.  A  wonderful  body  of  disciplined  and 
controlled  men,  whose  ambition  is  to  avoid  a  fight,  but  when 
once  they  enter,  to  win.  They  have  never  been  known  to  lose 
the  lost  trail  of  a  criminal ;  they  have  never  been  known  to  fail 
to  land  him  and  bring  him  to  justice. 

It  is  said  during  the  gold  rush  in  our  part  of  Alaska  there 
were  13  murders — 13  murders  in  our  Yukon  territory.  Of  these 
13  I  believe  10  were  brought  to  justice  immediately,  brought 
to  trial,  convicted  and  hanged.  One  man  committed  suicide, 
two  escaped,  one  was  followed  for  six  months  and  found  in 
eastern  Canada,  brought  to  justice  and  executed.  One  escaped 
to  the  United  States  of  America  for  a  year  and  a  half,  eluded 
the  vigilance  of  the  police,  but  with  the  co-operation  of  the 
American  police,  he,  too,  was  finally  rounded  up,  brought  back 
to  Canada,  tried  and  executed ;  so  that  every  murderer,  by  the 
hands  of  justice,  was  brought  to  punishment. 

I  had  a  very  vivid  account  of  the  activities  of  the  mounted 
police  in  the  recent  strike  given  me  by  a  young  man  who  seemed 
to  take  particular  delight  in  describing  it  to  me.  His  picture  of 
two  of  these  red-coated  men  riding  down  the  streets  of  Winni- 
peg and  sweeping  that  crowd  before  them  was  quite  thrilling. 
The  pity  of  it  all  was  that  this  should  have  been  necessary. 

The  Strike  Broken 

The  strike  was  broken — broken  not  so  much  by  the  military 
and  police  forces  organized  by  them,  but,  first  of  all,  by  the 
organization  of  the  citizens  of  Winnipeg  for  public  service.  By 
volunteer  work  they  managed  to  carry  on  every  public  utility 
with  fairly  good  success.  The  telephone  girls  had  their  places 
taken  by  the  young  ladies  of  Winnipeg.  The  work  of  the  tele- 
graph operators  was  taken  over  by  volunteers.  The  fire  halls 
were  managed  by  volunteers.  The  various  duties  around  the 
City  Hall  were  performed  by  volunteers.  Every  single  public 


370         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

utility,  every  Government  work  was  carried  on  by  volunteers 
organized  in  a  most  thorough-going  way.  But  what  really  broke 
the  strike  was  the  sense  that  the  public  mind  was  outraged  by 
the  action  of  the  strikers. 

Now,  if  any  of  you  know  Canada,  you  know  this — that  it  is 
one  of  the  fundamental  principles  of  our  national  faith,  one  of 
the  bed-rock  principles  of  our  whole  national  life,  that  the  law 
must  run,  that  the  law  must  be  obeyed.  No  man  has  money 
enough  to  buy  himself  off,  no  man  is  influential  enough  to  es- 
cape. The  law  does  run  from  east  to  west,  from  north  to  south, 
and  where  the  strikers  made  their  fatal  mistake  was  when  they 
began  to  tamper  with  the  running  of  the  law  in  that  city  of 
Winnipeg.  When  the  strike  began  many  of  the  respectable  and 
thoughtful  citizens  of  Winnipeg  were  in  sympathy  with  the 
strikers  and  were  prepared  to  listen  to  their  claims  and  to 
demand,  as  I  have  heard  spoken  here  this  evening,  investiga- 
tion and  absolute  justice  for  them,  and  had  it  not  been  for  the 
leadership  of  those  who  were  imported  from  abroad — I  believe 
from  your  country,  largely — had  it  not  been  (I  do  not  know 
whether  they  were  American  citizens  or  not)  for  your  people 
coming  across,  I  do  not  believe  we  would  have  had  any  trouble 
at  all. 

Anarchists  Attempted  Control 

But,  while  this  strike  was  not  initiated  by  the  "Reds"  and  was 
not  carried  on  by  the  "Reds,"  it  finally  came  to  be  exploited  by 
the  "Reds."  They  came  in  and  took  hold  of  the  situation.  It 
looked  promising  to  them  and  it  was  carried  on  further  than 
the  original  strikers  intended.  When  it  appeared  to  Winnipegers 
that  this  was  an  organized  movement  against  law  and  order, 
from  that  moment  the  strike  was  doomed  to  failure.  It  would 
not  have  been  difficult  to  raise  100,000  men  who  would  have 
been  ready  to  venture  their  lives  to  put  down  this  attack  upon 
government  or  attempt  to  overturn  law  and  order. 

Public  Opinion  Decides 

•  We  have  had  many  strikes  in  Canada,  many  strikes  in  Win- 
nipeg (and  with  some  of  them  I  have  been  associated,  not  as  a 
striker,  but  sometimes  as  a  conciliator  and  in  other  connec- 
tions) ,  but  we  have  never  had  a  single  strike  succeed  that  has 


THE  RED  MENACE  371 

not  been  backed  up  by  public  opinion.  The  reason  has  been 
that  public  opinion  is,  after  all,  the  mightiest  force  in  every 
civilized  and  intelligent  nation.  And  my  hope  that  the  indus- 
trial situation  in  America  will  be  saved  and  its  problems  solved 
in  Canada,  as  in  this  country,  lies  in  the  fact  that  the  great  body 
of  the  American  people  and  the  great  body  of  the  Dominion 
people  are  intelligent  and  are  determined  to  preserve  govern- 
ment. I  have  no  sympathy  with  the  club  as  the  solution  of 
industrial  difficulties.  That  is  the  kind  of  thing  we  went  over 
to  fight  in  Europe.  I  have  no  sympathy  with  that  method  of 
settling  disputes.  There  is  only  one  way  of  settling  a  dispute, 
and  that  is  by  understanding,  by  sympathy,  by  justice.  The 
gentleman  who  preceded  me  is  right;  the  first  great  necessity 
is  to  know  the  facts,  which  means  investigation,  then  to  sympa- 
thetically and  justly  deal  with  them. 

I  expect  the  privilege  of  speaking  to  you  tomorrow;  other- 
wise I  would  take  a  little  time  in  speaking  upon  this  aspect  of 
the  question,  because  one  of  the  things  that  have  developed  in 
connection  with  British  industrial  disputes  has  been  the  in- 
sistent demand  that  no  action  shall  be  taken  by  either  side  until 
investigation  shall  bring  complete  knowledge  of  the  facts  be- 
fore the  minds  of  those  interested. 

Right  Shall  Prevail 

Now,  Mr.  Chairman,  I  think  I  have  told  you  all  that  I  have 
to  tell  you  about  the  Winnipeg  strike.  I  have  a  lot  more  I 
would  like  to  say  to  you  upon  the  subject  of  industrial  unrest. 
I  shall  probably  have  the  chance  tomorrow.  But  just  now  allow 
me  to  mention  these  two  principles.  First,  I  think  it  is  essen- 
tial that  all  of  us  should  make  up  our  minds  that  the  initial 
step  toward  industrial  peace  or  any  other  kind  of  peace  is  the 
principle  that  right  shall  be  done  under  all  circumstances; 
that  right  shall  be  done  at  all  costs.  Understand,  on  this  prin- 
ciple we  challenged  the  Hun.  The  Hun  deliberately  said :  "It 
is  not  necessary  always  that  right  shall  be  done;  if  you  can 
demonstrate  that  it  pays  to  do  wrong,  not  only  may  you  do  it, 
but  you  ought  to  do  it."  And,  therefore,  because  it  looked  to 
the  advantage  of  Germany  to  walk  across  Belgium's  face,  Ger- 
many said :  "Not  only  may  we  do  this,  but  we  must  do  it,  and 
we  ought  to  do  it."  And  may  I  say  here  I  am  proud  to  belong 


372         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

to  an  empire  that  was  willing  to  risk  its  whole  future  and 
destiny  to  maintain  the  opposite  cause?  [Applause.]  And  I 
am  proud  to  speak  to  a  body  of  men  and  women  here  tonight 
that  represents  a  nation  that  went  to  war,  not  because  they  were 
insulted,  not  because  they  had  lost  their  men  and  women  upon 
the  high  seas,  not  because  they  had  been  injured  in  the  face  of 
men  and  God,  not  for  revenge,  but  because  of  their  devotion  to 
this  eternal  principle  that  the  right  thing  must  go  and  nothing 
else  must  go;  it  was  that  for  which  America  went  to  war. 
[Applause.] 

One  of  the  things  we  bring  back  with  us  from  the  battle- 
fields of  Flanders,  one  of  the  things  we  re-establish  in  this 
country  and  in  mine,  is  just  that  simple  principle  that  every- 
where— among  the  nations  and  in  the  nations  and  with  the  indi- 
viduals— the  thing  that  is  seen  to  be  right  must  inevitably  be 
done.  That  does  not  mean  we  all  have  the  same  standard  of 
right,  not  at  all.  The  miner's  standard  tonight  is  a  different 
thing  from  the  mine  owner's  standard ;  his  may  not  be  the  right 
standard,  but  there  is  a  right  standard  and  the  point  is  this, 
gentlemen :  That  the  men  who  are  determined  that  the  right 
shall  run  are  taking  the  first  step  to  discover  what  the  right 
thing  is.  The  man  who  does  not  wash  his  mind  and  his  soul 
free  of  the  determination  to  put  something  over  that  is  for  his 
gain  cannot  hope  to  see  the  right ;  he  never  sees  it. 

Seventeen  Royal  Commissions 

The  first  step  toward  intelligence  is  that  conscience  shall 
rule.  When  I  was  in  England  at  one  time  there  were  17  royal 
commissions  who  were  trying  to  discover  the  path  of  peace  for 
various  organizations  and  industries.  You  do  not  mean  to  tell 
me  that  those  men — and  they  were  the  first  men  in  the  whole 
of  Britain  on  both  sides — you  do  not  mean  to  suggest  that  those 
men  were  bankrupt  of  brains.  Any  of  you  who  know  anything 
about  the  British  statesmen  and  British  labor  leaders  know 
they  have  brains;  they  are  men  of  high  intelligence.  One  of 
the  curses  that  has  fallen  upon  us  in  Canada  today  is  that  our 
labor  movement  is  in  the  hands  of  uneducated  and  light-weight 
men.  Not  so  in  England — brainy  men,  big  men,  men  of  wide 
experience,  men  who  have  climbed  up  and  have  a  right  to  be 
at  the  top,  are  leading  the  forces  of  labor. 


THE  RED  MENACE  373 

I  say  you  do  not  mean  to  say  to  me  that  the  reason  that  all 
these  commissions  are  necessary  is  that  England  is  bankrupt 
of  brains.  She  is  not.  Why  is  it?  Because  in  the  minds  of 
these  men  there  have  not  been  cleared  away  the  mists  that 
arise  from  prejudice,  from  wrong  tradition,  from  selfish  aims. 
The  moment  that  they  come  to  say  to  each  other,  before 
Almighty  God  and  their  own  conscience,  "Whatever  we  see  to 
be  the  right  thing  we  will  do  at  all  costs,  no  matter  what  it  is 
or  whom  it  hurts/'  that  moment  the  light  will  begin  to  shine 
on  the  right  path  by  which  they  go  to  peace.  [Applause.] 

I  would  like  very  much  to  stay  for  this  whole  Congress,  not 
to  take  part  in  the  debates,  but  to  hear  what  you  are  going  to 
say.  I  am  going  to  give  you  a  little  bit  of  advice.  Do  you 
mind  if  I  give  you  that? 

The  American  Brotherhood 

You  know,  after  all,  we  feel  in  Canada — we  did  not  a  while 
ago,  but  we  do  now — that  the  American  people  are  not  what 
we  called  them  before  the  war,  "our  cousins" ;  we  have  gotten 
much  closer  to  you;  we  feel  you  are  our  "big  brothers." 
[Applause.]  We  learned  to  feel  that  about  you  when  we  saw 
you  in  France — that  is,  when  we  saw  you,  recognized  you  and 
learned  to  respect  and  reverence  and  love  you.  That  is  where 
we  are  tonight,  and,  therefore,  a  man  has  a  right  to  speak  to 
his  big  brother  if  he  does  it  respectfully.  [Laughter.] 

I  want  to  say  to  you  that  what  comes  from  this  Congress  is 
going  to  have  a  tremendous  influence  upon  the  thinking  of  the 
American  public  for  the  next  number  of  months,  and  perhaps 
for  years.  I  have  in  my  heart  a  very  deep  concern,  because 
your  country  affects  mine ;  I  am  selfish  about  it ;  I  have  in  my 
heart  a  deep  concern  that  the  wisdom  of  this  Conference  and 
the  big-heartedness  of  this  Conference  and  the  sense  of  right 
and  justice  in  this  Conference,  and,  above  all,  gentlemen,  the 
consideration  for  humanity  in  this  Conference,  will  so  guide 
your  thinking  and  your  acting  and  your  resolutions  that  this 
Conference  will  be  referred  to  during  the  next  years  that  are 
to  come  as  "The  Conference  that  showed  us,  first  of  all,  the 
way  that  led  to  industrial  peace  and  to  industrial  right  being 
done."  [Applause.] 


374         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

READJUSTING  AMERICA 

After  Dinner  Address  of  GOV.  FREDERICK  D.  GARDNER,  of  Missouri 

Mr.  Toastmaster,  Mr.  President  and  Delegates  to  The  Ameri- 
can Mining  Congress :  I  had  the  pleasure  of  a  little  conversa- 
tion with  your  distinguished  Secretary  upon  my  arrival,  and 
he  remarked  to  me  about  the  many  different  boosts  that  he 
had  heard  for  St.  Louis  and  Missouri.  He  said:  "All  of  you 
seem  to  be  blowing  here  about  your  country  and  your  com- 
munity," and  he  reminded  me  of  the  story  I  have  heard  about 
the  distinguished  guest  who  was  invited  to  visit  a  certain 
community.  There  were  assembled  all  of  the  leading  lights  of 
this  town,  and  each  of  them  spoke  of  the  wonderful  possi- 
bilities of  both  town  and  community.  All  agreed  that  there 
was  only  one  thing  that  prevented  theirs  from  being  the 
greatest  city  and  the  greatest  community  in  all  the  nation, 
and  that  was  the  fact  that  they  were  located  800  miles  from 
tidewater. 

Finally,  the  distinguished  guest  of  the  evening  arose  and 
said:  "Gentlemen,  I  have  heard  all  that  you  have  said  this 
evening,  and  I  have  heard  that  there  is  only  one  thing  that  you 
want  here  in  order  that  you  may  become  the  greatest  city  in 
the  Union.  I  will  tell  you  how  you  can  have  it."  And  they  all 
listened  for  the  magic  word,  and  he  said:  "Now,  I  will  tell 
you  what  to  do.  Construct  a  pipe  line  from  the  Atlantic  Ocean 
to  this  town,  and  if  the  men  around  this  table  can  suck  as 
hard  as  they  can  blow,  you  will  have  the  Atlantic  Ocean  in 
here."  [Laughter  and  applause.] 

But,  my  friends,  it  is,  indeed,  a  great  pleasure  for  me,  speak- 
ing as  Chief  Executive  of  the  Commonwealth,  to  extend  to  this 
distinguished  assembly  a  most  hearty  welcome  to  St.  Louis 
and  to  Missouri. 

You  will  return  home,  I  dare  say,  greatly  benefited  by  your 
interchange  of  ideas  and  by  personal  examination  of  the 
technique  of  the  latest  developments  in  the  great  mining  indus- 
try— an  industry  so  necessary  and  so  vital  to  the  welfare  of 
the  nation. 


READJUSTING  AMERICA  375 

It  is  particularly  fortunate  that  this  great  metropolis  should 
have  been  chosen  this  year  for  your  meeting  place.  No  doubt, 
many  of  you  have  come  from  sections  of  the  country  where 
the  industrial  situation  has  grown  acute  and,  to  a  certain 
extent,  alarming.  You  will  be  enabled,  from  this  vantage 
point,  to  view  these  industrial  questions,  perhaps  from  a  dif- 
ferent angle  and  a  different  standpoint,  for  it  is  a  remarkable 
fact  that  in  St.  Louis  and  in  Missouri,  during  the  last  three 
years,  capital  and  labor  have  been  at  peace ;  and  on  this  day  of 
our  Lord,  so  far  as  I  am  aware,  there  is  not  a  single  strike  of 
any  moment  within  the  entire  borders  of  the  Commonwealth. 

Here,  then,  you  have  an  object-lesson  of  safe,  sane,  con- 
servative leadership  on  the  part  of  capital  and  on  the  part  of 
labor.  One  has  but  to  observe  in  this  great  city  the  tremen- 
dous on-rush  of  industry  on  every  hand.  Acres  of  great  build- 
ings arising  as  if  by  magic.  Manufacturers  overwhelmed  with 
orders.  Work  for  every  pair  of  willing  hands.  Banks  over- 
flowing with  deposits.  Newspapers  flooded  with  advertising. 
Indeed,  it  is  a  picture  upon  which  you  may  profitably  reflect. 

Great  in  Peace  or  War 

Frequently  I  have  been  asked  how  it  was  possible  for  Mis- 
souri, with  her  enormous  foreign  population,  to  achieve  her 
magnificent  record  as  the  great  war  State  and  also  the  great 
peace  State.  My  answer  has  been  that  we  have  no  foreigners 
in  Missouri.  [Applause.]  For  a  hundred  years  this  State 
has  been  opening  wide  her  arms  to  the  oppressed  people  of  the 
world.  Here  they  have  found  that  which  they  have  sought — 
liberty,  freedom  and  prosperity.  Truly,  this  has  been  a  melt- 
ing-pot, superheated  by  the  wonderful  Missouri  spirit,  out  of 
which  has  come  genuine,  loyal'American  citizens.  [Applause.] 

We  have  not  asked  that  these  strangers  forget  their  father- 
land nor  the  songs  of  their  mother  tongue.  We  have  not  asked 
that  they  forget  the  flag  of  their  forefathers.  But  we  have 
demanded  that  their  first  allegiance  must  be  to  the  Stars  and 
Stripes  [applause] ;  and,  should  there  be  an  issue  between  our 
country  and  any  other  in  all  the  world,  they  must  defend  our 
Government  with  their  blood.  [Applause.]  We  must  have  no 
little  Jerusalems,  no  little  Bohemias,  no  little  Italys  in  Missouri. 
We  are  all  one  big,  happy  family.  We  speak  one  language,  and 


376         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

that  is  the  language  we  can  all  understand — our  national 
language. 

We  are  not  seriously  threatened  with  radicalism  or  any 
other  sort  of  "ism."  Aside  from  the  organized  activities  of 
the  national  Government,  to  protect  the  fundamental  prin- 
ciples upon  which  the  nation  was  founded,  we  have  the  safe- 
guard of  the  States.  Men  of  the  type  of  Governor  Coolidge 
and  the  Governors  of  the  other  47  States  may  be  counted  upon 
at  all  times  to  preserve  law  and  order. 

And  then  we  should  not  forget  the  3,000,000  American  sol- 
diers who  have  returned  to  their  beloved  country  imbued  with 
a  deeper  love  for  American  institutions  and  the  American  flag 
than  ever  before  in  their  lives.  They  have  once  offered  their 
youth  and  their  blood  in  defense  of  the  traditions  and  senti- 
ments of  the  nation,  and  they  will  do  so  again  if  need  be. 

The  Soldier  Element 

The  American  soldier  has  observed  events  in  Europe  at  close 
range  and  he  well  understands  the  difference  between  democ- 
racy and  license;  liberty  and  anarchy;  freedom  and  the  spirit 
that  would  tear  down  our  laws,  and  the  idle  who  would  live 
from  the  savings  of  the  thrifty.  He  understands  the  differ- 
ence between  a  political  system  and  a  social  disease.  He  under- 
stands the  various  "isms."  There  is  only  one  sort  of  an  "ism" 
that  is  going  to  satisfy  these  soldiers  and  that  is  the  unadul- 
terated, old  style  Americanism. 

We  should  be  thankful  at  this  season  that  the  nation  has 
been  blessed  with  good  health.  Twelve  months  ago  the  ravages 
of  disease  were  more  destructive  to  life  than  war.  Today  we 
enjoy  good  health  from  one  end  of  the  land  to  the  other.  As 
a  nation,  never  have  we  had  so  much  to  be  thankful  for  as  we 
will  have  next  Thursday,  the  27th,  when  we  offer  our  prayers 
to  Almighty  God  on  that  Thanksgiving  Day. 

Not  only  have  we  won  the  great  World  War,  but  we  have 
been  true  to  our  principles  and  have  refused  to  listen  to  the 
siren  song,  "To  the  victor  belongs  the  spoils."  [Applause.] 
We  did  not  enter  the  war  for  conquest  nor  for  gold,  and  we 
have  remained  steadfast  to  our  purpose,  demanding,  in  season 
and  out  of  season,  that  all  war  must  end  and  that  we  must 
have  a  just,  lasting  and  righteous  peace. 


READJUSTING  AMERICA  377 

Farmer  Will  Demand  Justice 

We  should  be  thankful  that  a  kind  Providence  has  caused 
our  fields  to  yield  an  abundant  harvest.  Food  is  plentiful  and 
the  farmer  is  selling  his  product  at  very  reasonable  prices. 
And  this  brings  me  to  warn  those  of  you  who  are  employers, 
as  well  as  employes,  that  if  the  farmer  sells  his  wheat  at  $2, 
his  corn  at  $1.30,  his  hogs  at  15  cents,  his  cattle  at  12  cents, 
in  return  he  will  expect  merchandise  sold  on  a  corresponding 
basis.  This  places  squarely  before  the  employer  and  the 
employe  the  question  of  the  importance  of  producing  more  of 
the  necessities  of  life  in  order  that  prices  may  become  more 
reasonable. 

Public  Rights  Recognized 

I  do  not  expect  on  this  occasion  to  enter  into  a  detailed  dis- 
cussion of  the  problems  of  capital  and  labor.  No  doubt  you 
have  heard  or  will  hear  them  discussed  from  various  stand- 
points. The  Governor  of  a  State  is  supposed  to  represent  all 
the  people,  and  particularly  the  public;  and,  speaking  for  the 
public,  the  public  demands  of  capital  and  labor  that  they  find 
some  method  of  settling  their  disputes ;  and  if  they  do  not  do 
this  in  the  near  future,  then  the  public,  through  its  organized 
channels,  the  courts,  the  legislatures  and  the  Congress,  will 
take  the  matter  in  hand  and  settle  it  for  both  employer  and 
employe. 

Our  problems  of  reconstruction  and  readjustment  are  neces- 
sarily complex  and  complicated.  And  yet  when  we  look  back 
upon  those  which  confronted  our  forefathers  at  the  close  of  the 
Revolutionary  War,  we  must  see  that  they  are  comparatively 
easy  of  solution.  Let  us  recall  that  the  13  Colonies  were  torn 
with  dissensions  and  jealousies.  They  had  no  constitution,  no 
stabilized  currency,  no  foreign  trade.  Washington  was  assailed 
by  enemies  on  every  hand.  Yet  out  of  the  chaos  emerged  a 
new  republic,  founded  upon  principles  that  will  survive  forever. 

At  Close  of  Civil  War 

Let  us  picture  the  conditions  existing  at  the  close  of  the 
Civil  War.  The  South  devastated,  its  manhood  slain  or 
wounded,  the  entire  vast  section  completely  bankrupt;  the 
border  States  torn  by  feuds  and  family  strife.  The  North  with 


378         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

hundreds  of  thousands  of  dead  and  maimed,  President  Lincoln 
assassinated,  President  Johnson  impeached,  the  cost  of  living 
mounting  up  by  leaps  and  bounds,  commerce  destroyed,  no 
standard  of  currency — paper,  silver  and  gold  each  upon  a  dif- 
ferent basis.  And  yet  within  a  few  years  the  nation  righted 
herself,  the  difficulties  vanished,  and  prosperity  reigned.  So 
shall  we  of  this  generation  shrink  from  our  problems  in  face 
of  the  heroic  deeds  of  our  forefathers. 

Strife  Must  Cease 

What  the  public  demands  at  this  time  is  that  in  all  of  their 
enterprises,  particularly  those  of  such  magnitude  that  any 
interruption  in  their  operation  injuriously  affects  large  groups 
of  people  personally  interested  therein,  employers  and  employes 
shall  cease  coercive  methods  in  dealing  with  each  other  and 
form  a  "league  of  peace,"  in  a  spirit  of  mutual  helpfulness 
and  co-operation.  If  in  a  few  instances  the  drift  appears  for 
the  present  to  be  away  from  such  a  spirit  and  policy,  I  feel 
sure  it  is  but  temporary  and  that  shortly  wiser  counsel  and  a 
more  cordial  spirit  will  prevail  in  both  camps.  I  thank  you. 
[Applause.] 


AMERICANISM  379 


AMERICANISM 

Address  by  REPRESENTATIVE  JAMES  G.  STRONG,  of  Kansas,  at  the 
Annual  Dinner  of  The  American  Mining  Congress,  St.  Louis,  Mo. 

Mr.  Toastmaster,  Gentlemen  of  The  American  Mining  Con- 
gress: It  is  a  great  honor  to  me  to  be  present  with  you  this 
evening,  and  to  sit  beside  your  distinguished  Governor  and 
to  look  into  the  faces  of  a  body  of  men  who  are  gathered 
together  for  the  high  purpose  that  you  have  avowed  you  are 
here  for. 

I  was  to  speak  to  you  tomorrow  on  the  subject  of  "Alaska," 
but  as  it  is  impossible  for  me  to  remain  here,  I  was  placed  on 
the  program  here  tonight.  I  regret  that,  being  from  Kansas 
and  a  member  of  the  American  Congress,  I  "cannot  tell  a 
story,"  but  I  will  try  to  tell  you  tonight  a  little  of  the  feeling 
I  have  regarding  the  present  situation  in  America. 

I  am  one  of  those  men  who  believe  in  the  patriotism,  and  the 
good  sense,  and  the  honesty  of  the  American  citizen,  and  I  do 
not  think  that  we  need  to  fear  the  future  of  this  great  country 
of  ours.  We  are  today  facing  a  serious  situation.  Selfishness 
seems  to  be  the  spirit  that  is  moving  large  bodies  of  men; 
men  are  associating  together  for  the  purpose  of  advancing 
selfish  interests,  and  in  advancement  of  those  interests  they 
are  losing  sight  of  the  great  Government  that  has  protected 
them  for  all  these  years. 

It  is  a  great  Government ;  it  has  been  the  dream  of  the  cen- 
turies ;  it  was  a  Government  built  by  men  who  did  not  think  of 
themselves;  it  was  saved  for  us  in  '61  by  men  who  did 
not  think  of  themselves  alone.  Our  own  boys  went  out  to 
fight  against  a  spirit  that  sought  to  conquer  the  world,  and 
they  did  not  think  of  themselves.  The  true  Americans  will 
now  settle  these  questions  without  thought  of  themselves. 

Loyalty  Abounds 

Let  me  say  to  you  that,  in  spite  of  the  chaos  that  seems  to 
now  confront  us,  there  are  a  great  majority  of  Americans  who 
love  this  nation,  love  this  people's  government,  and  will  put 


380         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

down  all  strife.  You  need  not  fear  but  that  the  questions  now 
seeming  to  perplex  us  will  be  settled  in  the  interests  of  the 
great  majority  of  the  people  of  the  United  States. 

To  look  into  the  faces  of  a  body  of  men  like  this  is  an 
inspiration  to  a  man  charged  with  a  small  part  of  the  respon- 
sibility of  the  American  Congress.  While  I  am  but  a  freshman 
in  that  body,  I  have  been  struck  with  the  sincerity  of  purpose 
of  the  men  whom  I  have  met  there  in  the  past  six  months; 
men  who  said  to  me :  "My  vote  on  this  question  may  mean  my 
retirement  from  Congress,  but  I  will  cast  it  gladly."  A  man 
who  voted  on  a  bill  this  week  said  to  me:  "I  have  had  833 
telegrams  not  to  vote  for  this  bill."  I  said:  "Have  you  had 
any  telegrams  to  vote  for  it?"  And  he  answered:  "Not  one. 
I  had  one  friend  write  me  a  letter  who  said,  'Do  what  you  think 
is  right.' '  And  that  man  voted  for  the  bill. 

Congress  Is  Sincere 

I  want  to  say  to  you  men  that  in  Congress  today  there  is  a 
sincerity  of  purpose  to  back  up  the  Government  of  the  United 
States  in  saying  to  all  the  people :  "You  will  be  protected  from 
any  spirit  of  selfishness,  from  any  spirit  of  purpose  which 
seems  to  destroy  this  Government."  And  you  will  find  that 
when  President  Wilson  makes  a  stand  in  the  interests  of  all 
the  people,  as  he  has  just  made,  that  Congress — Democrats  and 
Republicans  alike — will  be  behind  him.  [Applause.] 

Victory  for  Nation 

It  is  with  great  pride  that  the  people  may  look  upon  the  vote 
against  Victor  Berger.  Victor  Berger,  during  the  time  when 
this  nation  was  enduring  its  most  severe  trials,  tried  his  best 
to  delay  and  hamper,  and  even  though  he  believed  he  was 
right,  nevertheless  he  tried  to  do  everything  that  would  pre- 
vent this  nation  and  this  nation's  government  from  doing 
what  it  had  set  its  purpose  to  do.  In  doing  those  things  he 
was  lending  aid  and  comfort  to  this  nation's  enemies  and  was 
so  disloyal  that  the  membership  of  the  American  Congress, 
by  a  vote  with  only  one  to  the  contrary,  said  to  him:  "You 
shall  not  pass." 

I  was  delighted  when  I  read  the  first  sentence  of  the  opening 


AMERICANISM  381 

statement  of  this  Convention,  "Recovery  of  industrial  balance 
through  resumption  of  maximum  production."  It  is  the  great 
outstanding  need  of  the  nation.  Gentlemen,  what  this  nation 
does  need  is  the  increased  production  of  the  great  supplies  of 
the  world.  With  Germany  saying  that  her  workmen  will  work 
12  hours  a  day,  America  must  ask  her  workmen  to  produce 
from  her  mines,  and  from  her  fields,  and  from  the  great, 
bounteous  plenty  that  God  has  given  us,  those  things  which 
the  men  and  women  of  this  country  and  the  world  need  at  this 
time. 

I  believe  that  the  great  spirit  of  the  American  workmen 
will  finally  yield  to  this  demand.  I  want  to  say  to  you  that  I 
have  faith  in  the  American  workingman;  I  sometimes  doubt 
the  leadership  and  I  always  doubt  the  element  that  tries  to  say 
to  him  that  he  shall  distrust  his  government;  but  I  cannot 
believe  that  any  American  workingman,  or  any  American 
millionaire,  or  any  American  industrial  leader,  will  ever  go  so 
far  as  to  do  that  thing  which  will  tear  down  this  Government. 

I  have  faith  in  the  American  people.  I  have  faith  in  bodies 
of  men  like  this.  I  know  what  your  purpose  is — I  know  that 
above  your  business,  that  above  everything  else  you  hold  dear 
in  the  world,  you  will  take  that  stand  for  Americanism  of 
which  your  splendid  Governor  has  just  spoken  so  well. 
[Applause.]  Let  me  assure  you  I  feel  that  this  pride  in  the 
citizenship  of  this  country  that  I  have  is  not  misplaced. 

The  Farmers'  Attitude 

I  want  to  read  to  you  some  resolutions  passed  by  a  farmers' 
union  in  my  county.  This  body  of  men  lived  12  miles  from  a 
railroad  station,  and  without  any  prompting  they  wrote  in 
their  own  little  schoolhouse  this  set  of  short  resolutions  and 
sent  them  to  me  last  week,  and  it  was  my  pleasure  to  ask 
unanimous  consent  of  the  Congress  to  place  these  resolutions 
in,qur  records.  They  read  as  follows: 

"Resolved,  That  we  resent  the  implication  that  the  farmers 
of  this  country  can  be  yoked  up  with  greed  and  lawlessness, 
whether  capitalistic,  laboristic  or  Bolshevistic,  and  we  call 
upon  all  in  authority  to  quell  lawlessness  wherever  it  may 
occur  with  firmness  and  dispatch,  and  demand  of  those  in  posi- 
tions of  leadership,  in  farmers'  organizations  and  the  organ- 


382         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

izations  themselves,  shall  take  such  action  as  will  place  the 
farmer  in  an  attitude  of  true,  uncompromising  Americanism." 
[Applause.] 

When  we  had  under  consideration  the  railroad  bill  last  week, 
providing  for  a  settlement  between  the  employer  and  the 
employe,  we  were  beset  with  all  kinds  of  suggestions  as  to  what 
the  labor  clause  in  that  law  should  be.  The  laboring  men  who 
operate  the  railroads  came  to  us  and  said:  "In  25  years  we 
have  not  had  a  strike.  During  the  war  we  settled  1,300  cases 
of  disagreements  between  the  Railroad  Administration  and  the 
employes,  and  we  settled  them  by  boards  appointed  by  the 
Government  and  by  the  men.  Give  us  a  chance  to  confer  and 
we  will  settle  with  the  men  we  work  for."  That  spirit  of  firm- 
ness so  influenced  a  majority  of  the  House  that  it  said:  "We 
will  take  you  railroad  men  at  your  word.  We  will  give  you  that 
kind  of  a  clause  in  this  bill."  And  that  kind  of  a  clause  went 
into  the  bill  and  it  passed  the  House. 

Congress  Trusts  Railroad  Men 

Gentlemen,  I  want  to  say  to  you  that  sitting  in  that  House 
on  that  day  were  a  large  majority  of  the  membership  who 
would  have  voted  for  a  radical  anti-strike  law  if  they  thought 
it  would  have  been  necessary,  but  they  decided  to  trust  the 
American  railroad  man ;  they  decided  to  take  him  at  his  word, 
and  they  passed  that  kind  of  a  settlement  clause.  What  it  will 
be  when  it  comes  back  from  the  Senate  will  depend  upon  the 
labor  situation  at  that  time. 

You  understand,  gentlemen,  that  in  writing  this  bill  we  were 
dealing  only  with  the  railroad  men  of  the  country,  and  not 
any  other  class  of  labor.  It  was  thought  best  to  take  this 
stand,  but  I  want  to  say  that  it  is  my  opinion  that  the  Con- 
gress of  the  United  States  has  made  up  its  mind  that  when  it 
comes  to  the  test  the  great  mass  of  the  people  shall  be  pro- 
tected at  every  cost.  That  has  been  the  statement  of  the 
President  of  the  United  States  and  the  Congress  voted  unani- 
mously to  stand  by  him  on  that  proposition.  You  need  not  be 
afraid  that,  when  it  comes  to  the  acid  test  in  this  country,  the 
spirit  of  Americanism,  the  spirit  of  that  principle  that  means 
"Do  unto  others  as  you  would  have  others  do  unto  you,"  will 
prevail  in  this  country  from  one  end  to  the  other. 


AMERICANISM  383 

I  will  be  very  glad  to  take  back  with  me  this  splendid  picture 
of  this  fine  body  of  men,  because  it  means  that  you  men,  going 
out  to  your  homes,  will  carry  that  spirit  of  Americanism  to 
which  I  have  just  listened,  which  means  that  the  great  public 
interest  must  be  protected,  and  that  neither  employer  nor 
employe  must  do  that  thing  which  will  tear  down  the  great 
structure  of  citizenship  that  we  have  builded. 

Government  Will  Stand 

My  good  friends,  we  may  see  trying  times,  but  I  want  to 
say  that  this  Government  will  stand.  It  has  been  builded 
unselfishly,  but  when  the  time  of  trial  comes,  when  the  hour 
comes  when  we  men  forget  self,  then  you  will  find  that  right 
will  prevail.  [Applause.] 

Your  Secretary  tells  me  that  you  expect  to  ask  Congress  to 
pass  a  law  to  prohibit  the  use  of  gold  coin  for  commercial  pur- 
poses. As  a  member  of  the  Banking  Committee,  it  will  be  a 
pleasure  to  me  to  describe  this  meeting  to  that  Committee  and 
to  urge  them  to  seriously  consider  this  bill,  and  I  think  you 
may  depend  upon  its  favorable  recommendation  to  Congress. 

I  want  to  say  to  you  that  the  members  of  the  American 
Congress  appreciate  men  writing  them  their  views.  Very  often 
I  get  a  letter  saying,  "I  would  like  to  apologize  for  taking  your 
time."  Why,  my  good  friends,  when  you  are  two  or  three 
thousand  miles  away  from  the  people  you  are  trying  to  repre- 
sent, if  there  is  anything  on  earth  you  most  want  to  know 
it  is  what  the  fellows  at  home  are  thinking  about.  Don't  fear, 
as  is  often  said,  that  the  members  of  Congress  are  not  trying 
to  represent  their  constituents — that  is  the  very  thing  they  sit 
up  nights  trying  to  do ;  they  realize  that  their  success  depends 
upon  whether  or  not  they  meet  the  view  of  the  majority  of 
the  people  from  their  district. 

Do  not  let  the  radical  element  prevail  upon  the  members  of 
Congress  to  believe  that  the  sentiment  is  one  thing  when  you 
men  know  it  to  be  another.  You  men  have  a  great,  weighty 
argument;  it  is  for  you  we  legislate;  so  sit  down  and  write 
your  Congressman  and  your  Senator  and  tell  him  how  the 
fellows  at  home  are  thinking  on  this  or  that  question.  I  hope 
you  will  do  it. 


384         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

As  a  new  member  of  the  American  Congress,  I  have  come 
to  believe  in  the  sincerity  of  the  men  I  have  met  there.  I  have 
met  splendid  men  in  Congress,  men  with  a  loyal  purpose, 
and  I  have  come  to  honor  them,  both  Democrats  and  Repub- 
licans, and  I  only  ask  you  to  have  faith  in  your  Government; 
take  your  part  in  the  great  struggle  that  is  going  on,  and  let 
us  go  forward  to  Americanism  that  means  so  much  to  the 
world.  We  do  not  need  to  fear  the  foreigner  when  he  comes 
over  here ;  we  will  soon  vaccinate  him  with  true  Americanism, 
and,  my  friends,  "if  it  does  not  take,"  we  are  going  to  send 
him  home.  [Applause.]  That  is  going  to  be  the  policy  of  this 
Government  very  soon.  I  thank  you.  [Applause.] 


THE  REAL  RUSSIA  385 


THE  REAL  RUSSIA 

Address  by  HON.  FEDOR  F.  FOSS,  Member  Russian  Mining  Commission, 

at  the  Annual  Dinner  of  The  American  Mining  Congress, 

St.  Louis,  Mo. 

Mr.  Toastmaster  and  Gentlemen:  It  takes  a  brave  man  to 
follow  these  brilliant  speeches  by  standing  up  here  and  reading 
from  papers  on  which  have  been  written  the  words  that  he 
desires  to  say.  Impromptu  remarks  may  be  made  at  one's 
club,  but  in  such  an  audience  one  must  give  more  consideration 
to  his  utterances,  or  in  the  cold  gray  light  of  day  they  might 
resemble  those  of  an  honest  farmer,  who,  in  selling  a  blind 
horse,  said :  "He  is  all  right,  except  that  he  doesn't  look  good." 
[Laughter.]  So  I  hope  you  will  permit  me  to  read  my  re- 
marks. 

What  you  already  know  about  Russia  shows  you  that  the 
Russian  question  is,  for  the  time  being,  not  a  political  one, 
but  a  question  of  world-wide  significance.  This  question  is  a 
question  of  Bolshevism  versus  Civilization,  and  unless  it  is 
solved  in  a  right  way,  it  is  bound  to  be,  in  the  future,  a  cause 
of  great  trouble  to  the  whole  world. 

Resources  of  Russia 

I  was  requested  to  tell  you  something  about  the  natural  re- 
sources of  Russia  and  the  opportunities  there  for  the  mining 
industry.  But  I  feel  it  my  duty  on  every  occasion  to  emphasize 
that  before  any  issue  can  be  taken  upon  the  industrial  life  of 
Russia,  as  well  as  upon  the  life  of  any  other  country,  the 
fundamental  question  must  be  decided,  i.  e.,  How  will  man- 
kind go  on,  either  toward  Bolshevism  or  toward  real  democ- 
racy? 

I  do  not  need  to  tell  you  what  Bolshevism  means,  as  well  as  I 
do  not  need  to  explain  to  you  that  under  the  real  democracy  I 
understand  Americanism. 

We  foreigners,  having  the  privilege  and  pleasure  to  be  here 
and  study  your  life  and  daily  work,  believe  that  the  United 
States  of  America  gives  the  best  example  how  a  nation  of 


386         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

100,000,000  can  give  to  the  majority  of  her  sons  a  chance  to  live 
happy  and  in  well-being.  The  only  condition  to  belong  to  this 
majority  is  to  work  to  produce.  [Applause.] 

We  firmly  believe  that  your  country  will  in  a  short  time 
pass  through  the  difficulties  of  the  post-war  period,  the  period 
in  which  the  very  fundamental  principles  of  ethics  and  morals 
are  wavering.  You  shall  easily  fight  through  this  period, 
because  of  your  internal  strength,  because  the  union  of  the 
48  States  is  stronger  than  any  other  union  on  the  globe.  The 
United  States  of  America  Will  show  to  the  civilized  world  how 
to  settle  the  very  acute  industrial  disputes  in  a  proper  way, 
having  always  in  mind  that  "Salus  republicae  est  supremo,  lex" 
(The  welfare  of  the  republic  is  the  supreme  law) . 

The  Socialists'  Utopia 

The  country  where  such  principles  govern  can  be  compared 
"with  a  mechanism  of  highest  efficiency  obtainable  at  the  pres- 
ent level  of  education  and  morals.  It  reminds  me  of  one  talk 
I  had  with  a  Socialist  during  the  strike,  when  they  started  to 
spoil  machinery  and  furnaces  in  the  works  where  I  was  man- 
aging director.  I  asked  him :  "Why  are  the  strikers  destroying 
the  wealth  of  the  nation ;  would  not  they  prefer  to  use  these 
assets  in  the  future,  if  they  believe  they  are  right  and  are 
going  to  win?"  He  replied  that  revolutionary  socialism  does 
not  care  for  the  wealth  created  by  capitalists;  that  after 
having  established  a  new  form  of  society  they  will  build  up 
everything  anew  and  create  such  an  ideal  state  that  everybody 
shall  be  happy,  wealthy,  working  only  two  hours  a  day ;  it  will 
be  a  government  of  100  per  cent,  efficiency. 

I  asked  him  where  he  had  seen  such  a  state,  and  he  replied 
that  such  a  state  is  not  in  existence  yet,  but  that  Socialists 
are  sure  they  are  able  to  create  such  a  one,  Now  I  ask  have 
you  seen  in  nature  such  a  machine  which  works  with  100  per 
cent,  efficiency,  with  no  friction,  no  radiation,  no  other  losses. 
And,  as  there  is  no  such  thing  in  the  world,  shall  you  refuse  to 
use  a  machine  with  less  perfection  than  100  per  cent,  efficiency, 
but  which  can  meet  most  of  your  requirements? 

This  machine  with  most  up-to-date  mechanism,  having  a 
good,  reliable  self-government,  with  a  good,  solid  flywheel  in 
its  constitution,  can  be  adjusted  and  regulated  to  the  speed 


THE  REAL  RUSSIA  387 

needed.    This  machine  has  all  that  is  needed  for  an  efficient 
and  smooth  run. 

Suggests  an  Experiment 

I  hope  you  will  not  mind  if  I  take  the  liberty  to  make  a  sug- 
gestion :  Why  not  take  a  thousand  of  advocates  of  Bolshevism 
in  the  United  States  and  parlor  Bolshevikis  and  send  them — 
at  Government  expense — to  stay  for  some  time  in  the  paradise 
of  socialism,  near  by  the  apostles  of  Bolshevism?  I  am  quite 
sure  all  of  them  will  return  pretty  soon,  and  at  their  own 
expense,  with  good  knowledge  as  to  where  is  the  real  paradise 
and  where  is  the  hell.  After  such  an  experiment  you  shall 
have  1,000  more  good  citizens.  [Applause.] 

For  me  it  is  quite  clear  that  when  the  post-war  fever 
passes  the  world  will  follow  the  steps  of  real  democracy.  Bol- 
shevism tried  to  make  something  new  and  created  an  ugly 
mechanism  without  governors  and  with  a  large  flywheel. 
They  started  to  run  this  machine  fast  and  the  machine  burst ; 
the  broken  pieces  ruined  the  foundation  and  the  roof  of  the 
whole  building.  The  workmen  were  buried  under  the  frag- 
ments. Everything  stopped — only  the  designers  of  such  ma- 
chines temporarily  survive,  to  see  that  their  machine  has  10G 
per  cent.,  but  in  inefficiency. 

Russia  Is  Starving 

The  disaster  is  on  hand.  Russia,  the  wealthiest  agricultural 
country,  is  literally  starving.  But  such  a  standstill  of  a  coun- 
try with  180,000,000  souls  cannot  last  a  long  time.  The  coun- 
try with  such  a  history  as  Russia,  with  a  race  who  built  up 
one  of  the  largest  empires  in  the  world,  cannot  perish,  and 
Russia  shall  not  perish. 

We  hope  that  the  time  is  not  far  away  when  the  constructive 
forces  of  Russia  will  rally,  take  the  upper  hand  and  Russia 
will  start  to  run — maybe  not  very  smoothly  from  the  begin- 
ning— toward  the  real  democracy. 

Russia  Needs  Help 

Here  again,  the  United  States  of  America  should  come  ta 
the  front  and,  as  an  elder  sister,  assist  the  new-born  democracy 


388         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  give  to  Russia  all  moral  support  and  the  benefit  of  experi- 
ence of  its  political  and  industrial  institutions. 

When  this  stage  of  affairs  will  be  accomplished,  what  will  be 
the  attitude  of  the  United  States  toward  Russian  industry  ? 

What  are  the  reasons  by  which  Americans,  never  having 
paid  any  special  attention  to  the  industries  of  Russia,  as  well 
as  to  the  industries  of  any  other  country  of  the  Eastern  Hem- 
isphere, will  show  particular  interest  in  Russia,  the  country 
which  has  the  largest  area  on  the  globe,  with  natural  resources 
nearly  identical  to  the  same  of  the  United  States  of  America? 

The  reasons  are — in  my  mind — the  strategy  of  minerals 
and  the  strategy  of  investment.  These  words  sound  a  little 
warlike,  but  war  has  taught  you  many  things,  and  among  them 
showed  you  the  importance  of  minerals  and  the  role  they  play 
in  war  as  well  as  in  peace. 

Strategy  of  minerals  during  the  war  consists  in  the  idea  that 
you  must  have  all  minerals  necessary  for  war  purposes  in 
your  own  country.  If  you  do  not  produce  some  of  them,  you 
have  to  provide  the  necessary  amount  from  outside,  and  have 
such  a  foresighted  policy  in  international  relations  which  will 
assure  you  getting  easily  and  in  time  all  you  need. 

Germany,  before  the  war,  showed  a  good  example  of  un- 
derstanding of  the  strategy  of  minerals.  If  you  take  now 
a  glance  on  statistics  of  your  mining  industry,  you  shall  see 
that,  notwithstanding  the  fact  that  the  United  States  is  one 
of  the  few  countries  practically  self-sufficient  in  mineral  re- 
sources, it  needs  some  minerals,  the  domestic  supply  of  which 
is  not  adequate.  By  God's  blessings,  Russia  is  the  second  in 
self-sufficiency  of  mineral  resources. 

Wonderful  Mineral  Supplies 

In  the  number  of  minerals  where  your  output  is  small,  Rus- 
sia shows  pretty  high  figures  of  production.  Our  output  of 
platinum  averages  95  per  cent,  of  the  world's  production ;  our 
output  of  manganese  ore  reached  55  per  cent,  of  the  world's 
supply ;  we  have  large  deposits  of  chrome  ores,  of  magnesite, 
of  tin  and  asbestos.  The  deposits  of  platinum  are  proven  to 
have  not  less  than  100  tons;  the  deposits  of  highest  grade 
manganese  ore  are  inexhaustible. 

Russia  with  her  depleted — by  war  and  Bolshevism — intel- 


THE  REAL  RUSSIA  389 

lectual  and  financial  forces  shall  be  unable  for  many  years 
hence  to  develop  these  resources  by  her  own  means.  And  here 
comes  the  strategical  question — who  shall  develop  these  re- 
sources which  you  may  need?  Either  they  will  be  developed 
by  the  powers  which  some  time  may  be  in  an  opposing  group  to 
you,  or  you  shall  spend  a  little  effort  to  get  in  friendly  business 
control  of  these  minerals.  That  is  not  up  to  me  to  decide. 

Strategical  Opportunity 

The  strategy  of  investment  is  another  idea  of  no  less  impor- 
tance. In  peace  time  it  may  have  even  more  importance.  It  is 
self-evident  that  the  United  States  of  America  is  bound  to  go 
into  the  foreign  markets  for  developing  the  foreign  trade.  It 
is  a  matter  of  fact,  and  does  not  need  to  be  proved,  that  the 
foreign  trade  and  foreign  investment  have  a  close  connection. 
You  cannot  export  to  the  foreign  countries  without  allowing 
them  to  repay  you  in  some  form  or  other.  Either  they  have  to 
import  into  your  country  raw  or  finished  products,  or  give  you 
an  opportunity  to  invest  your  money  in  their  country.  By  this 
means  only  can  the  purchasing  power  of  foreign  money  be  kept 
on  the  level. 

Now,  here  is  again  a  strategical  question:  Where  shall  you 
go  with  your  money  to  invest?  To  the  countries  which  will 
take  your  money,  reconstruct  and  develop  their  industrial 
facilities,  and  compete  with  you  in  the  foreign  markets,  or 
shall  you  find  it  more  wise  to  go  to  such  countries  which  will 
give  you  the  opportunity  to  bring  in  your  capital  and  knowl- 
edge and  develop  their  industries  for  their  own  use? 

Everything  produced  by  the  re-established  or  newly  estab- 
lished industries  of  such  countries  will  be  consumed  in  its  in- 
ternal markets.  There  won't  be  competition  from  Russia  in 
finished  products  in  the  international  markets  for  many 
decades  to  come.  On  the  contrary,  Russia  will  consume  not 
only  capital  for  investment,  but  will  consume  all  kinds  of  goods 
which  only  could  be  imported  and  paid  for. 

It  is  important  to  emphasize  here  the  well-known  fact  that 
the  investor  in  the  foreign  country  can  easily  control  pro- 
duction, and  has  also  the  means  to  control  the  import.  To 
illustrate  what  field  of  opportunities  new  Russia  will  offer,  I 
shall  abuse  your  patience  with  some  statistics. 


390         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Vastness  of  Russia 

Russia  has  an  area  over  eight  and  one-half  million  square 
miles ;  the  United  States  of  America  has  a  little  over  three  mil- 
lions- The  population  of  Russia  is  about  180,000,000  of  clever, 
industrious  and  good-hearted  people ;  80  per  cent,  of  whom,  it 
is  sad  to  say,  are  illiterate.  When  the  land  question  is  finally 
settled,  they  will  strive  to  better  their  economic  condition  and 
will  welcome  all  improvements  which  can  be  brought  into  their 
life. 

The  length  of  railroads  in  Russia  in  1911  was  about  forty- 
eight  thousand  miles,  as  compared  with  two  hundred  and  forty- 
seven  thousand  miles  in  the  United  States.  Passengers  car- 
ried, two  hundred  and  thirteen  millions,  as  compared  with 
ninety-nine  hundred  millions  in  the  United  States.  Pounds 
of  merchandise  carried,  six  thousand  two  hundred  billions,  as 
compared  with  one  hundred  and  twelve  thousand  billions  in  the 
United  States. 

The  number  of  postoffices  was  9,235,  against  60,000  in  the 
United  States.  The  number  of  telegraphs,  10,190,  against 
25,000  in  the  United  States.  The  number  of  telephones, 
214,782,  as  against  7,596,000  in  the  United  States.  The  length 
of  telegraph  lines,  400,000  miles,  against  1,300,000  miles  in  the 
United  States.  The  length  of  telephone  lines,  330,000  miles, 
against  16,000,000  miles  in  the  United  States. 

In  the  public  utilities  line,  it  is  interesting  to  note  that  out 
of  1,031  towns  only  219  had  an  organized  water  supply.  Of 
these  only  167  provided  water  to  private  homes.  Only  40  towns 
have  sewerage  systems.  Out  of  1,031  towns,  1,068  have  public 
lighting,  of  which  162  have  electricity,  128  gas,  and  the  rest 
have  kerosene.  Fifty-four  towns  have  tramways;  32  towns 
have  telegraph  service,  and  314  towns  have  telephone  service. 

The  production  of  metals  per  capita  in  1917  was :  Coal,  440 
pounds,  as  compared  with  10,340  pounds  in  the  United  States; 
pig  iron,  45  pounds,  as  compared  with  1,100  pounds;  copper, 
.5  pounds,  as  compared  with  1.60  pounds;  petroleum  oil,  10 
gallons,  as  compared  with  1,500  gallons.  Lead,  zinc,  silver  and 
tungsten  are  merely  started  in  production. 


THE  REAL  RUSSIA  391 

Fortunes  Await  Investors 

Out  of  these  illustrations  you  can  see  what  has  to  be  done 
for  development  of  industries,  railroads,  public  utilities  and 
mining  resources  of  Russia.  Here  are  vast  deposits  of  coal  and 
iron;  here  are  large  placers  of  gold,  producing  one  concern 
up  to  15  tons  a  year ;  here  are  placers  of  platinum  where  the 
production  is  recorded  by  tons  and  not  by  ounces.  Here  are 
vast  deposits  of  high-grade  manganese  ore,  of  magnesite,  cop- 
per, lead,  silver  and  zinc,  oil  and  oil  shale.  Here  are  the  largest 
forests,  and,  last  but  not  least,  the  largest  deposits  of  very 
good  coal  and  oil  on  the  Pacific  Ocean  are  located  on  the  Rus- 
sian part  of  Sachaline  Island.  The  sense  of  the  strategy  will 
show  you  what  you  have  to  do  toward  these  resources. 

Having  traveled  through  the  whole  area  of  the  United  States 
of  America  during  more  than  two  years,  as  chairman  of  the 
Mining  Commission  of  the  Russian  Extraordinary  Mission  to 
the  United  States,  and  having  observed  closely  American 
activities  and  the  character  of  the  people,  I  am  confirmed  in 
the  idea  with  which  I  came  here.  I  thought  that  the  personal 
character,  the  general  conditions  of  life,  the  love  for  adven- 
ture and  for  developing  new  places,  the  habit  of  doing  busi- 
ness on  a  large  scale  and  in  vast  territories,  all  this  makes 
Americans  best  adapted  to  go  into  Russia. 

Russia  Pro- American 

Russian  public  opinion,  the  sympathies  of  the  Russian  people 
were  always  pro-American.  The  greater  part  of  the  Russian 
population  realizes  that  the  United  States  is  not  concerned  with 
politics  in  Russia ;  they  seek  nothing  for  themselves  as  a  nation, 
and  aim  only  to  develop  something  and  not  to  sit  idle.  Since 
the  earliest  days  of  existence  of  this  Union,  under  the  Stars 
and  Stripes,  Russia  always  enjoyed  the  friendship  of  the 
United  States ;  and  one  time,  in  1863,  when  it  fought  for  its 
existence,  the  United  States  had  but  one  friend,  and  this  friend 
was  Russia.  [Applause.] 

Now,  when  Russia  is  in  bad  straits,  as  your  country  was  in 
the  Civil  War,  all  we  who  love  Russia  entertain  the  hope  that 
Uncle  Sam  wiU  lend  his  mighty  hand  and  help  her,  remember- 
ing what  Russia  has  done  for  humanity  in  the  last  struggle  for 
freedom  of  the  world.  [Applause.] 


392         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


INDUSTRIAL  CONDITIONS   IN   ENGLAND 

Discussion  by  DR.  CHARLES  W.  GORDON,  of  Winnipeg,  Manitoba,  at 
the  Informal  Dinner  to  Delegates,  Wednesday  Evening,  November  19 

Mr.  Toastmaster,  Members  and  Gentlemen :  I  feel  like  telling 
a  story  I  once  heard  from  the  late  distinguished  scientist, 
Henry  Drummond,  who  was  a  very  dear  friend  of  mine.  He 
was  covering  the  West  Coast  of  America  and  was  interested 
in  the  trees.  He  asked  the  driver  about  the  size  of  these 
trees — the  driver  was  a  very  glum  person  and  did  not  seem  to 
care  to  give  much  information,  but  Drummond  still  persisted. 
They  came  to  one  tree  that  had  fallen  down;  it  looked  very 
huge  upon  the  ground,  and  he  said  to  him :  "Now,  tell  me,  how 
tall  do  you  think  that  tree  is?"  "I  don't  know,"  the  driver 
said.  "Well,  how  much  lumber  would  that  saw  into?"  "I 
don't  know."  "How  much  wood  would  it  make,  do  you  think  ?" 
"Well,  stranger,"  the  driver  said,  "I  don't  know,  but  I  will  tell 
you  that  when  that  tree  fell  the  echo  of  it  lasted  for  two 
weeks."  [Laughter.]  So  I  feel  the  same  about  this  mining 
convention. 

I  have  been  tremendously  impressed  with  the  potentialities 
in  this  Congress,  and  the  more  I  see  of  it  and  the  more  I  study 
your  program  the  more  impressed  I  am.  I  am  down  to  say 
something  about  the  industrial  situation  in  Britain,  but  I  am 
not  going  to  take  very  much  time  in  talking  about  that.  I 
fancy  you  know  something  of  the  history  of  that  situation 
during  the  war. 

British  Labor  Party 

I  am  going  to  say  one,  or  two,  or  three  things  about  the 
things  before  the  war.  One  thing  different  between  the  situa- 
tion in  that  country  and  Canada  is  that  the  labor  people  in 
Britain  are  organized  into  a  well-defined  political  party  and 
run  candidates  for  Parliament,  and  have,  at  this  time,  quite 
a  large  number  of  labor  representatives  in  the  House  of  Com- 
mons. This,  in  some  ways,  is  a  disadvantage,  but  I  think  the 
general  feeling  in  England  is  that  it  is,  on  the  whole,  a  great 
advantage.  It  is  of  advantage  to  the  Government,  for  they 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  393 

always  know  where  to  find  labor,  they  always  have  on  the  floor 
of  the  House  those  who  are  prepared  to  speak  authoritatively 
in  regard  to  labor's  demands,  and  they  know  exactly  what 
to  do. 

I  remember  being  in  the  House  one  day  during  the  war, 
when  I  was  on  leave  from  the  front.  The  Government  was 
having  some  difficulty  with  the  railroad  men  and  was  proposing 
legislation  that  seemed  to  some  of  the  labor  members  likely 
to  precipitate  a  strike,  and  that,  of  course,  during  the  war 
would  have  been  a  very  disastrous  thing. 

I  heard  Mr.  J.  H.  Thomas  on  the  floor  of  that  House  make 
such  a  presentation  of  his  case  for  labor  and  such  an  appeal 
to  the  members  of  the  House  of  Commons  for  patient  considera- 
tion that  actually  he  persuaded  the  Government  to  withdraw 
that  bill. 

I  mention  that  for  two  reasons:  First,  to  show  you  that 
when  labor  is  organized  as  a  political  party  the  Government 
of  the  day  can  handle  it,  I  believe,  with  greater  success ;  and, 
second,  incidentally  to  ask  you  to  notice  the  superior  quality  of 
leadership  in  the  English  and  Scotch  Labor  party. 

Another  characteristic  that  is  rather  important  is  this: 
That  among  the  labor  people  of  Great  Britain  you  have  the 
socialistic  wing,  not  the  rabid  and  wild,  red  socialistic  wing 
that  you  are  perhaps  more  familiar  with  here,  but  a  sound  and 
sane  and  scientific  body  of  men  who  study  social  and  economic 
questions  in  the  light  of  the  latest  results  of  scientific  inves- 
tigation, and,  therefore,  you  have  a  socialism  which,  while  it 
may  be  advanced  to  a  certain  extent,  is  constructive  rather 
than  destructive. 

British  Labor  Respects  Law 

May  I  ask  you  to  think  of  a  third  thing  that  is  characteristic 
of  the  situation  in  British  labor:  The  laboring  people,  with  all 
the  other  classes  in  Britain,  have  a  profound  reverence  for 
law  and  order,  and  are  very  impatient  with  anything  that 
savors  of  a  promotion  of  revolution.  The  only  lawless  people 
that  I  know  or  can  think  of  in  Great  Britain  before  the  war 
were  the  suffragists,  and  they  were  a  rather  difficult  proposi- 
tion for  the  people  to  deal  with.  They  were  taken  as  a  joke  at 
first,  but  their  activities  were  so  industriously  pursued  and 
so  effectively  carried  on  that  the  thing  very  soon  passed  from 


394         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

being  a  joke  to  a  very  serious  question.  It  is,  however,  an 
eternal  credit  to  the  leaders  of  the  suffragette  movement  that 
once  the  war  drum  beat  not  a  suffragette  was  heard  in  the 
land.  [Applause.] 

Now,  during  the  war,  if  I  were  to  say  one  thing  that  would 
generally  describe  the  attitude  of  labor  to  the  country  and 
the  country's  cause,  I  would  say  that  on  the  whole  labor 
played  the  game — labor  played  the  game!  They  had  strikes, 
a  few  strikes.  For  instance,  they  had  a  strike  in  the  coal 
mines  of  Wales,  that  was  caused,  I  believe,  largely  by  mis- 
understanding and  a  misunderstanding  which  very  naturally 
arose. 

There  was  a  feeling  among  the  miners  that  the  coal  owners 
were  making  huge  fortunes  at  their  expense,  and  I  am  bound 
to  say  that  it  was  pretty  largely  true,  because  the  Government 
had  not  adopted  a  new  system  under  which  the  coal  business 
could  be  carried  on  in  a  manner  proper  to  war,  but  carried  on 
with  the  old  system  suitable  to  peace. 

Lloyd  George  went  down  to  Wales  and  met  his  fellow- 
countrymen  there.  The  Government  took  over  part  of  the 
mines,  and  those  other  miners — whose  mines  were  not  taken 
over — accepted  the  Government's  terms,  and  throughout  the 
war  there  was  no  more  trouble  in  the  coal  mines  in  Wales. 

War-Time  Troubles 

There  were  other  strikes  that  threatened  throughout  the 
war,  almost  always  due  to  the  same  causes — a  suspicion  of 
profiteering,  and  an  impatience  that  any  class  of  people  should 
be  making  huge  profits  while  others  were  suffering.  That  was 
largely  the  determining  element  in  causing  strikes ;  but,  after 
all,  throughout  the  whole  four  years  and  a  half  of  the  war 
labor  played  the  game  and  stood  by  the  country. 

May  I  add  three  characteristics  that  distinguished  labor  in 
Britain  and  that  will  explain  the  attitude  of  the  workers  during 
the  war?  In  the  first  place,  they  were  led  by  able  men.  I  need 
only  remind  you  of  such  names  as  these:  Mr.  J.  H.  Thomas, 
secretary  of  the  Railway  Union ;  Mr.  Clymes,  Mr.  Barnes,  Mr. 
Adamson,  Mr.  Henderson,  and  even  the  radical  Mr.  Smiley  is 
a  very  able  man  indeed.  These  people,  many  of  them,  have 
come  up  through  the  ranks,  but  they  have  studied  economic 
industrial  and  social  questions.  They  have  studied  these  very 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  395 

thoroughly  indeed,  and  I  fancy  you  could  take  any  one  of  them 
and  find  him  familiar  with  all  the  modern  works  in  economics 
or  sociology. 

Secondly,  and  very  important  it  is.  They  were  men  who 
were  really  of  patriotic  spirit.  They  loved  their  country  and 
were  willing  to  sacrifice  even  their  class  prejudices  and  class 
ambitions  and  class  interests  to  the  general  good  of  the  coun- 
try. So  they  postponed  many  a  fight  until  after  the  war 
was  won. 

Thirdly,  they  were  under  pressure  of  a  very  strong  public 
opinion.  Now,  when  you  think,  gentlemen,  that  from  every 
English  home  and  every  Scotch  home,  especially  from  the 
North  of  Scotland,  from  every  home  in  those  islands,  men 
were  out  in  the  front  line  fighting  or  in  the  munition  shops 
working  long  hours  to  keep  the  fighting  men  supplied  with 
munitions;  their  women,  too — you  can  see  that  any  body  of 
men  that  would  venture  to  take  an  attitude  contrary  to  what 
was  for  the  good  of  the  country  in  this  terrific  crisis  could 
not  live  very  long.  So  under  the  compulsion,  under  the  tre- 
mendous pressure  of  such  a  tense  spirit  of  patriotism,  labor 
had  to  play  the  game  and  did. 

I  do  not  make  that  last  remark  with  the  idea  of  lessening  at 
all  the  sense  of  gratitude  that  we  owe,  as  a  nation,  to  the 
labor  people. 

The  Whitley  Commission 

But  during  the  war  there  was  an  under-current  of  discon- 
tent and  incipient  strife  making  itself  felt  here  and  there 
throughout  the  country.  Hence  the  Government  appointed  a 
Royal  Commission  to  go  into  the  whole  business  of  labor 
unrest  and  of  discontent  in  industrial  relations.  That  was  the 
famous  Whitley  Commission.  Anyone  who  is  studying  modern 
economics  cannot  afford  to  neglect  the  study  of  the  work  done 
by  the  Whitley  Commission  in  Great  Britain  and  the  report  of 
that  Commission. 

I  am  not  going  to  go  into  that  report  with  you.  The  Com- 
mission was  composed  of  men  representing  all  classes  of  labor 
and  all  classes  of  employers  and,  together  with  them,  experts 
from  various  universities  and  other  organizations.  Men  who 
had  studied  all  these  questions  and  had  become  recognized 


396         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

authorities  upon  these  questions  were  put  on  that  Commission. 
That  Commission  went  to  work  and  made  a  most  thorough 
investigation  of  every  industry  in  Great  Britain ;  the  report  is 
voluminous  and  contains  a  vast  mass  of  information. 

The  feature  which  I  would  say  differentiates  that  report 
from  others  is  this,  that  it  puts  its  finger  upon  one  of  the 
great  causes  of  unrest ;  a  widening  cleavage  between  the  work- 
ingman  and  his  employer  in  regard  to  the  management  of  the 
business.  The  report  recommended  that  there  should  be  estab- 
lished in  every  industry  a  joint  committee  representative  of 
the  various  classes  of  workers  in  any  industry,  and  also  of  the 
owners  and  operators.  Some  industrial  concerns  had  already 
given  representation  on  the  directorate  to  their  workers.  The 
report  recommended  that  this  custom  should  be  made  uni- 
versal. In  very  many  cases  this  experiment  has  been  made 
and  with  marked  success. 

Through  that  committee  complaints  would  come.  With  that 
committee  the  management  would  hold  regular  sessions,  not 
when  trouble  arose,  but  regular  sessions  to  discuss  any  matter 
that  it  might  deem  wise  to  discuss.  Complaints  would  come 
up  through  the  committee,  and  the  answers  of  the  general 
committee  would  represent  the  united  and  best  judgment  of 
the  representatives  of  both  management  and  men. 

Report  Adopted  by  Industries 

The  Whitley  report  has  been  adopted  by  a  very  large  num- 
ber of  the  industries  in  Great  Britain,  and  I  have  yet  to  hear 
of  any  single  instance  where  it  has  not  been  of  very  great 
service  in  preventing  friction  and  in  preventing  strikes. 

Now,  gentlemen,  when  I  speak  to  you  about  British  condi- 
tions, do  not  for  a  moment  imagine  that  I  am  saying  that  any 
plan  that  may  work  in  Britain  will  necessarily  work  here,  or 
that  anything  that  I  speak  of  as  prevailing  in  Britain  is  better 
than  anything  you  have  here.  Not  that,  but  I  simply  give  you 
a  picture  of  some  of  the  essential  differences  that  hold  between 
the  industrial  situation  there  and  in  this  country,  and  of  how 
the  industrial  conditions  in  Britain  are  being  met. 

Revolution  Threatened 

After  the  war  had  closed,  there  was  at  once  a  recurrence  of 
the  old  condition  of  things  which  before  the  war  threatened 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  397 

revolution,  for  I  need  not  remind  you  that  before  the  war 
things  were  in  a  very  serious  condition  in  Great  Britain, 
socially  and  economically.  It  was  one  of  the  things  that  de- 
ceived Germany  into  thinking  that  that  was  an  opportune 
moment  for  getting  into  the  war,  for  she  imagined  that  Britain 
was  so  torn  with  factions  at  home  that  she  could  not  get  her 
people's  united  support  for  war.  Her  opinion  in  that,  as  well 
as  in  other  things,  notably  her  opinion  of  America,  proved 
wholly  unsound  to  her  bitter  disappointment  and  tragic  loss. 

This  after-war  unrest  seemed  to  spring  up  almost  in  a  night 
and  seemed  to  affect  almost  every  industry  in  Britain.  It 
was  a  bad  time,  and  it  is  a  bad  time  still,  because  Britain  is 
very  heavily  in  debt,  staggering  under  her  debt,  and  especially 
was  it  serious  as  affecting  the  coal-mining  industry,  which  in 
Britain  is  the  basic  industry  of  the  whole  country.  Not  only 
does  she  depend  upon  coal  to  carry  on  her  various  manufac- 
turing industries  without  which  she  cannot  live,  but  coal  is 
also  one  of  her  chief  exports,  and  upon  her  coal  exports  she 
relies  to  a  considerable  extent  to  maintain  her  exchange  with 
other  nations. 

After  months  of  unrest  a  crisis  was  reached.  A  strike  was 
threatened  in  the  coal  mines.  The  Government  sought  the 
labor  leaders,  called  them  into  conference,  and  I  want  you  to 
notice  that  just  here  is  an  advantage  of  having  a  Labor  party 
in  Parliament.  The  labor  leaders  gathered  together  in  London. 
The  Government  called  this  conference  and  was  able  to  avert 
this  strike  for  a  certain  time,  on  the  promise  that  it  would 
establish  a  Royal  Commission  that  would  investigate  and 
would  bring  in  a  report  that  they  promised  would  settle  the 
thing.  That  was  the  famous  Sankey  Commission,  a  Commis- 
sion composed  of  experts  and  of  representatives  on  both  sides, 
with  Judge  Sankey  as  the  chairman.  Everybody  at  the  con- 
ference was  a  representative  man,  and  let  me  say  that  no  one 
acting  on  those  committees  was  ever  suspected  of  being  any- 
thing but  quite  sincere  in  his  desire  to  serve  the  country. 

Sankey  Report  Unsatisfactory 

The  report  came  in  and  was  unsatisfactory.  The  labor 
people  would  not  receive  it.  One  of  the  chief  points  of  conten- 
tion was  that  of  nationalization  of  mines.  The  Commission 


398         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

reported  that  they  had  not  had  sufficient  time  to  consider  a 
question  of  such  vast  and  far-reaching  importance.  But  they 
made  an  interim  report  in  regard  to  wages  and  conditions  of 
labor  and  conditions  of  life  and  asked  to  be  continued  in  exist- 
ence. I  may  say  to  you  that  these  conditions  of  labor  and  con- 
ditions of  life  are  always  a  very  large  and  important  element 
in  any  industrial  dispute. 

Bad  Housing  Conditions 

The  report  of  the  Housing  Commission  for  Great  Britain, 
appointed  some  years  before  the  war,  is  one  of  the  saddest 
things  you  can  read  in  connection  with  the  British  industrial 
situation,  and  one  of  the  things  that  British  people  are  thor- 
oughly and  heartily  ashamed  of.  I  need  not  go  into  that  now, 
but  this  always  comes  up  whenever  there  is  an  industrial 
struggle — the  housing  conditions,  the  conditions  which  accen- 
tuate every  difference  between  employer  and  employee. 

The  Sankey  Commission  made  a  strong  recommendation  on 
housing  and  other  conditions,  raised  the  wages  of  miners,  etc., 
and  promised,  if  the  Commission  was  continued,  to  take  up  the 
question  of  nationalization  of  mines  and  report  in  about  six 
weeks.  With  great  difficulty  the  Government  persuaded  the 
miners  to  delay  the  threatened  strike.  A  short  respite  was 
given,  and  the  Commission  sat  once  more  and  went  system- 
atically to  work. 

To  that  Commission  they  summoned  every  man  who  had  a 
tlieory,  whose  opinion  was  worth  considering — every  man  who 
had  a  theory  in  regard  to  the  operation  and  ownership  of 
mines.  He  was  invited  to  put  down  his  system,  plan  or  theory, 
to  reduce  it  to  a  systematic  plan  and  lay  it  before  the  Com- 
mission. The  very  best  thought,  experience,  intelligence  and 
learning  which  was  available  in  Britain  was  at  the  disposal 
of  the  Commission.  I  do  not  remember  just  now  how  many 
recommendations  were  proposed,  but  finally  three  reports  were 
made. 

No  Secret  Sessions  of  Commission 

Before  I  go  farther  on  that  I  want  to  say  this,  that  during 
the  discussion,  which  was  spread  out  upon  every  leading  paper 
in  Great  Britain,  everything  brought  before  the  Commission, 


INDUSTRIAL  CONDITIONS  IN  ENGLAND 

question  and  answer,  scheme  and  statement,  was  put  down. 
I  believe  every  man  in  the  nation  was  keenly  following  those 
discussions  and  the  presentation  of  various  plans  and  schemes,, 
because  they  read  their  papers  most  religiously.  They  do  not 
read  simply  the  headlines  in  Britain.  They  don't  run  much 
to  headlines,  but  they  are  getting  into  the  way  of  having  head- 
lines, which  are  all  right  for  a  busy  people  but  not  for  a  thought- 
ful people.  [Laughter.]  I  should  say  rather,  perhaps,  people 
with  time  to  think.  Those  discussions  were  followed  with  most 
acute  interest. 

Now,  I  was  conscious  of  this,  gentlemen.  I  must  say  when 
the  discussions  began  my  mind  was  inclined  toward  nation- 
alization— I  am  a  kind  of  radical,  anyway,  though  I  am  a 
Presbyterian  [laughter] — and  I  was  rather  hoping  that  the 
Commission  would  pronounce  in  favor  of  nationalization.  I 
am  bound  to  say,  as  I  followed  the  discussion,  as  I  met  the 
men  associated  with  the  labor  movement,  with  the  Minister  of 
Labor  and  the  various  secretaries,  I  found  my  mind  verging 
around,  first  to  the  attitude  that  I  was  not  certain  at  all 
whether  nationalization  would  be  wise,  and  by  the  time  the 
committee  was  ready  to  present  its  report  I  was  conscious  of 
a  hope  that  they  would  not  take  the  plunge. 

The  difficulty,  it  seemed  to  me,  would  be — and  I  was  dis- 
interested, of  course,  personally — that  it  would  be  attended 
with  so  much  that  was  doubtful  and  purely  experimental,  that 
the  risk  of  immense  loss  would  be  so  serious,  I  hoped  that  the 
report  would  go  against  nationalization. 

Divided  on  Nationalization 

Well,  the  Commission  was  half  for  and  half  against  nation- 
alization, which  was  finally  passed  by  the  deciding  vote  of  the 
chairman,  Judge  Sankey.  Now,  since  that  time,  public  opinion 
in  Great  Britain,  which  I  believe  was  like  mine  at  the  first, 
has  changed  somewhat.  I  think  the  body  of  people  not  inter- 
ested in  the  coal  mines  were  at  first  rather  in  favor  of  experi- 
menting with  nationalization  and  cherished  the  hope  that  as 
nationalization  had  been  so  successful  in  such  things  as  the 
postoffice  and  telegraph  it  might  be  tried  with  the  mines. 

You  see,  with  Great  Britain  the  coal  industry  is  the  very 
heart  and  soul  of  all  her  industry,  and  the  handling  of  that 


400         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

industry  is  a  big  national  concern.  It  is  like  no  other  industry ; 
it  is  like  nothing  you  have  in  this  country.  It  is  a  big  national 
enterprise. 

The  report  was  given  in,  and  there  was  a  very  great  disap- 
pointment on  the  part  of  the  miners  that  the  Government  did 
not  accept  and  at  once  put  into  operation  a  scheme  for  national- 
ization. But  the  Government  seemed  to  sense  the  general 
opinion  of  the  country,  and  refused  to  adopt  the  majority 
report  which  was  presented  by  Judge  Sankey.  Up  to  this  time 
the  Government  has  stood  firm  on  that  point  and  still  declines 
the  experiment  of  nationalization  of  mines. 

What  will  happen  I  do  not  know,  but  it  looks  more  and  more 
to  me  as  if  the  Government  would  stand  or  fall  upon  that  point. 
It  is  dead  certain  that  if  this  Government  does  not  stand  for 
nationalization,  the  succeeding  Government  will  be  less  likely 
to  adopt  that  scheme  and  plan  of  operating  the  mines. 

The  Railway  Strike 

I  have  taken  some  little  time  over  this  Sankey  Commission. 
I  will  not  go  into  the  later  developments  which  involve  the 
railway  strike,  except  to  say  this :  The  railway  strike  which 
occurred  a  few  weeks  ago  took  place  while  the  Government 
was  still  in  possession  of  the  railroads,  and  after  the  Govern- 
ment had  raised  the  wages  of  the  railroad  men  to  a  point 
much  higher  than  the  rate  before  the  war.  But  in  spite  of 
everything  that  they  had  done  in  the  way  of  meeting  the 
demands  of  the  railroad  men  a  strike  was  brought  on. 

The  strike  was  hopelessly  defeated  by  two  things:  First, 
the  Government,  anticipating  this  strike  some  months  before, 
had  made  such  a  wonderfully  perfect  arrangement  to  carry  on 
the  transportation  work  of  the  country  that  they  were  able  to 
relieve  the  country  of  the  most  acute  distress  that  was  caused 
by  the  dislocation  of  transportation  travel.  Second,  there  was 
aroused  throughout  the  whole  country  a  feyeling  of  indignation 
that  the  railway  men  should  precipitate  a  strike,  in  their  own 
particular  interests,  upon  the  country  when  it  was  in  its  pres- 
ent terrible  and  difficult  situation.  And,  gentlemen,  this  is  an 
object-lesson  for  all  those  interested  in  the  promotion  of 
strikes.  I  do  not  suppose  you  are,  I  have  never  heard  of  mine 
operators  striking  yet;  but  those  who  are  interested  in  pro- 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  401 

moting  strikes  ought  to  study  that  last  strike  of  the  railroad 
men  in  Great  Britain,  because  it  makes  this  clear  to  a  demon- 
stration, that  no  strike  in  a  civilized  country  can  possibly 
succeed  unless  it  is  backed  up  by  the  great  body  of  public 
opinion  of  that  country.  [Applause.] 

Now,  I  think  possibly  that  is  all  I  need  to  say  about  the 
situation.  It  is  a  very  fragmentary  and  rough  sketch  of  the 
industrial  conditions  in  Great  Britain,  but  there  are  some 
things  that  I  think  we  ought  to  have  learned  from  the  war, 
and  that  I  believe  we  will  learn  from  the  war  after  we  have 
had  time  to  think.  When  these  lessons  are  digested  by  the 
people  of  my  country,  and  of  Great  Britain  as  by  the  people 
of  this  country,  I  believe  we  shall  be  a  long,  long  way  on  the 
road  to  permanent  peace  and  to  industrial  prosperity. 

Right  Must  Be  Done 

The  one  thing  that  stands  out  in  my  mind  as  being  perhaps 
the  gain  of  chief  importance  in  the  region  of  ethics  brought 
back  to  us  from  the  war  is  this:  There  is  a  rehabilitation  in 
the  mind  and  heart  of  the  people  of  your  country  and  mine 
and  of  Great  Britain  that  in  all  cases  the  right  thing  must  be 
done  [applause],  that  conscience  must  be  king  [applause].  I 
said  that  last  night,  but  I  think,  while  we  approve  that,  not 
one  of  us  recognizes  the  fundamental  and  basic  importance  of 
that  simple  statement,  of  that  simple  principle  that  was  the 
issue,  above  everything  else,  which  we  took  up  with  Germany. 
It  was  the  thing  we  went  to  war  about.  It  was  the  thing  you 
Americans  went  to  war  about  in  the  last  analysis.  It  was  not 
because  you  lost  your  ships;  it  was  not  because  you  were 
insulted;  not  because  your  men,  women  and  children  were 
killed;  it  was  as  your  President  put  it,  and  the  whole  world 
owes  a  debt  of  gratitude  to  President  Wilson  for  the  clarity 
into  which  he  put  these  great  causes  and  these  great  principles. 
[Applause.]  It  wa$  because  you  felt  that  the  world  was  no 
longer  safe  for  free  peoples. 

If  we  take  back  from  the  war  that  simple  principle  and 
apply  it  to  our  national  life,  we  shall  find  that  it  cuts  very  deep 
to  the  root  of  things.  I  am  not  talking  about  standards,  you 
understand ;  I  am  talking  about  that  rule  of  conscience.  Every- 
man has  his  standard ;  your  standard  is  not  mine ;  the  standard 


402         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  the  mining  operator  is  not  the  standard  of  the  mine  worker. 
But  the  point  I  am  after  is  this:  That  men  should  be  true  to 
their  own  standards,  and  that  no  man  should  take  an  attitude 
or  pursue  a  course  of  conduct  which  he  does  not  feel  in  his 
own  heart  is  absolutely  right.  He  does  not  do  what  he  does 
for  self-interest;  he  does  not  do  it  because  his  class  demands 
it ;  he  does  not  do  it  because  of  pressure  from  outside ;  he  does 
it  because  of  the  conviction  in  his  soul  that  the  thing  before 
him  is  right  and  he  must  do  it.  That,  I  think,  is  the  first 
essential  to  industrial  peace. 

The  Meaning  of  Duty 

I  need  not  elaborate  on  that.  In  the  war  there  was  a  great 
army  word.  That  army  word  was  "duty."  Men  lived  and  died 
by  it.  We  learned  anew  what  that  word  means.  I  never  knew 
fully  in  civil  life  what  that  word  "duty"  meant.  I  never  knew 
how  deep  it  cut  until  I  went  up  to  the  front  line  one  night,  and 
walking  along  the  parapet  I  came  across  a  lad  who  was  on 
sentry  duty,  just  a  kid  17  he  was  then  and  had  already  seen 
two  years'  service,  lying  on  the  five-step  asleep.  We  had  come 
in  that  night,  marched  six  miles  in  the  rain  through  the  mud 
and  carrying  those  packs.  He  was  dead  tired ;  nobody  knows 
what  it  is  to  be  tired  who  has  not  been  through  that  experi- 
ence. Here  he  was  asleep,  and  I  remembered  that  there  was 
an  army  regulation  that  that  boy  should  be  reported  and  shot. 
Thank  God,  it  was  not  my  duty  to  report  him.  I  woke  him  up 
and  he  went  about  his  duty. 

I  never  realized  until  then  how  terrific  this  thing  duty  is. 
He  was  on  guard ;  his  duty  was  to  look  out  and  see  how  things 
were  on  the  German  wall.  His  comrades  were  asleep,  their 
trust  in  him  imposed  upon  him  a  duty,  he  ought  to  have  done 
his  duty,  and  for  failure  he  ought  to  have  been  shot/ 
.  Duty  is  the  most  terrific  thing  in  the  English  language,  and 
if  that  thing  should  get  into  the  American  soul,  no  matter 
who  the  man  is — employer  or  employee — it  will  go  a  mighty 
long  way  in  solving  industrial  differences.  [Applause.] 

Supreme  Value  of  a  Man 

I  am  going  to  add  one  thing  more,  and  that,  too,  has  a  very, 
very  close  bearing  upon  this  problem  of  industrial  strife.  I 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  403 

suppose  the  thing  that,  next  to  the  supremacy  of  conscience, 
which  impressed  itself  on  my  mind  is  this :  The  supreme  value 
of  a  man.  I  am  bound  to  say  before  I  went  to  the  war — and 
I  am  speaking  to  your  experience,  too — that  I  classified  men 
by  factitious  things,  classified  them  by  the  way  they  talked 
their  English,  by  their  education,  by  their  breeding — very 
much  by  their  breeding.  Thank  God,  I  don't  think  I  ever 
classified  them  in  my  esteem  by  their  wealth.  I  hope  to  God 
I  never  will  fall  to  be  such  an  intolerable  snob  as  that,  but  we 
all  classified  men  by  their  adjectives  that  described  them. 

When  we  found  them  out  on  the  front  line  we  dropped  the 
adjectives.  We  learned  to  appreciate  a  man  and  measure  his 
worth  by  just  one  thing — the  kind  of  soldier  he  was.  We 
only  asked  "How  does  he  stand  up  under  his  duty,  whether 
to  walk  up  under  a  pack  or  out  over  the  parapet  and  push  his 
bayonet  home?  How  does  he  measure  up  as  a  soldier?  How 
does  he  stand  by  his  comrades?  How  does  he  fulfill  his  duty?" 
We  did  not  care  whether  he  got  drunk  or  swore — and  I  am  a 
minister.  [Laughter.]  We  asked,  I  say,  "Is  he  a  soldier;  is 
he  true  to  his  comrades ;  is  he  true  to  his  duty  ?"  That  is  the 
big  thing.  It  is  a  thing  that  is  almost  impossible  to  carry  back 
with  us  from  the  war. 

I  try  to  realize  it ;  I  put  it  in  my  prayers,  gentlemen.  I  ask 
God:  "Let  me  never  forget  those  men  at  the  front.  The 
splendor  of  their  humanity,  the  wonderfulness  of  those  quali- 
ties of  the  hero  in  their  souls."  For  the  commonest  type  of 
common  men,  in  most  extraordinary  and  surprising  ways, 
would  suddenly  flame  up  into  glorious  heroes. 

The  Supreme  Sacrifice 

I  remember  a  little  chap  who  came  from  a  North  Ontario 
town,  an  insignificant  little  chap.  Nobody  knew  him  in  his 
town ;  even  in  his  own  battalion  his  colonel  did  not  know  him. 
He  was  standing  one  day  in  a  front-line  bay,  a  dozen  of  his 
comrades  with  him,  where,  of  course,  they  had  no  right  to  be. 
The  German  line  was  only  30  yards  away  and  a  live  bomb  came 
hissing  in  and  dropped  down  among  them.  They  all  scurried 
to  cover  except  this  little  chap.  Without  a  moment's  hesita- 
tion he  threw  himself  upon  the  bomb,  drew  it  to  his  heart  and 
was  blown  to  pieces.  But  he  saved  his  comrades.  A  common 
little  tike  of  a  man. 


404         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

I  tell  you,  gentlemen,  we  do  not  know  what  a  common  man 
is.  He  looks  to  me  uncommonly  like  God.  For  God  did  the 
same  thing1  when  He  saw  us  with  death  near.  He  threw  Him- 
self on  death  and,  by  dying,  saved  us.  Gentlemen,  we  ought 
to  write  this  down  some  place  on  our  souls,  that  there  is  no 
such  thing  in  the  world  as  a  common  man — that  in  the  most 
common  of  the  common  men  you  have  the  thing  that  is  glori- 
ously divine,  and  capable  of  development  up  to  sonship  of  and 
likeness  to  Almighty  God. 

Now,  does  anybody  imagine  that  half  of  our  difficulties  or 
three-quarters  of  them  do  not  arise  out  of  this,  that  we  mis- 
judge men,  we  misunderstand  men,  we  do  not  do  them  justice, 
we  do  not  give  them  credit  for  what  they  are?  We  know  it 
is  true.  And  after  we  have  composed  our  difficulties  and  have 
come  to  the  point  where  we  shake  hands  and  have  our  first 
friendly  conversation,  we  know  them  to  have  great  qualities 
which  we  could  not  see  before.  That  was  a  big  thing  in  the 
war,  the  revelation  of  the  supreme  worth  of  the  man. 

Solemn  Responsibility 

You  are  thinking  about  your  great  country  here  tonight, 
and  you  have  a  right  to  think  about  it.  About  the  greatness 
of  your  resources  and  all  that  sort  of  thing,  and  you  have  a 
right  to  think  of  these.  Not  one  of  you — the  biggest  Ameri- 
can of  you — knows  how  wonderful  and  how  great  your  country 
is.  It  is  not  a  thing  to  cheer  and  yell  about;  it  is  a  thing  to 
get  down  on  your  knees  over  and  pray  to  God  and  thank  Him 
for,  and  accept  the  responsibility  for  the  development  of  these 
things  given  to  you. 

But  when  we  are  thinking  of  America's  greatness — God  for- 
give us,  and  the  same  thing  is  true  of  us  Canadians — when  we 
are  asked  to  enumerate  the  things  that  make  America  or 
Canada  great,  I  am  bound  to  say  that  we  put  in  the  category 
those  things  that  are  the  merest  trappings  of  greatness.  We 
talk  about  our  resources,  our  mines,  our  fields,  our  businesses, 
our  commercial  greatness,  our  expansion,  and  all  these  things, 
which  are  great  things,  it  is  true,  but  we  sometimes  do  not 
place  in  the  category  or  think  of  the  one  thing  that  makes  a 
nation  great — the  man  in  it  and  the  woman  in  it!  The  man- 
hood of  a  nation,  the  womanhood  of  a  nation — that  is  the 
thing,  after  all.  [Applause.] 


INDUSTRIAL  CONDITIONS  IN  ENGLAND  405 

Tribute  to  Woman 

I  said  "the  womanhood  of  a  nation."  The  story  of  the  war, 
when  it  is  written,  will  have  many  glowing  pages,  but  I 
believe  the  most  glowing  will  be  those  which  record  the 
services  rendered  to  our  great  cause  and  to  our  country  by 
the  women  of  our  nation.  [Applause.]  I  noticed  in  one  of 
your  papers  today  these  remarkable  revelations  of  Ludendorff , 
and  you  notice  he  says  this  over  and  over  again,  that  the  reason 
why  Germany  failed — and  he  is  only  partly  right — was  that 
the  people  at  home  did  not  support  the  soldiers  at  the  front. 

Foch  said:  "This  war  will  be  won  not  by  the  army  of  the 
front  line,  but  by  the  army  of  the  base."  I  believe  he  was 
right,  and  when  the  story  of  the  war  is  fully  told  I  say  the 
most  illustrious  pages  will  be  reserved  for  those  heroic  souls 
who,  first  of  all,  sent  their  men  away  without  a  tear,  without 
repining,  without  holding  them  back.  I  never  saw  a  British 
woman,  I  never  saw  a  Canadian  woman,  who  tried  to  keep  her 
son  or  husband  back.  And  then  during  the  long,  anxious 
months  of  weary  watching  they  never  weakened,  but  kept 
writing  the  while  cheery  letters  to  their  boys  at  the  front. 

Sometimes  I  was  privileged  to  read  those  letters.  It  would 
make  my  heart  almost  break,  because  I  knew  they  were  not 
giving  the  picture  as  it  was  at  home.  "Carry  on,  Jack,  we  are 
all  right  here.  We  are  doing  well."  In  one  case  the  woman's 
whole  family  was  sick  and  she  herself  was  at  her  wits'  end 
to  meet  her  daily  needs  until  friends  came  in  and  discovered 
how  desperate  was  the  need  which  in  her  pride  she  had  refused 
to  reveal.  Such  women  reveal  to  us  more  and  more  the  splen- 
dor of  our  common  humanity. 

All!  I  think  I  understand  God  a  little  better,  because  I 
know  men  and  women  a  little  better.  I  understand  now  why 
it  was  He  thought  it  worth  while  to  come  and  share  our  for- 
tunes and  accept  our  fate,  because  I  believe  it  is  worth  while 
for  even  God  himself  to  die  to  save  a  race  of  men  and  women. 

Destroy  Class  Distinction 

Gentlemen,  may  I  say  to  you  this:  If  there  is  any  deliver- 
ance coming  for  America — and  there  is,  and  the  people  of 
America  are  waiting  for  it — will  you  cease  to  differentiate  men 
from  one  class  to  another  by  mere  externals?  Will  you  re- 


406         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

member  that  you  are  dealing  with,  that  you  are  legislating  for 
and  expressing  a  judgment  on  this  most  wonderful  thing  that 
God  ever  made — a  man?  And  will  you  remember  that  his 
fortunes  and  his  fate  will  be  in  your  hands,  very  largely,  for 
the  next  number  of  years? 

I  shall  not  apologize  that  I  have  forgotten  myself  and  gone 
farther  into  a  subject  than  I  intended  to  go,  but  these  two 
things  will  live  in  my  heart  as  long  as  I  breathe:  First,  that 
every  man  must  go  the  line  that  he  sees  to  be  right,  no  matter 
where  it  leads  him.  That  means  sacrifice  often  for  us,  but  re- 
member that  all  the  great  souls  pressed  that  road  and  all  the 
great  leaders  trod  that  way,  and  no  man  can  serve  his  country 
greatly  who  is  not  prepared  to  go  the  Way  of  the  Cross.  "The 
Royal  Pathway  of  the  Holy  Cross,"  an  old  Roman  Catholic 
saint  called  it,  and  he  was  right. 

And  the  second  thing  that  I  hope  I  shall  never  forget  is  that, 
among  all  the  things  we  ought  to  thank  God  for,  we  ought 
to  thank  God  that  He  made  us  men,  and  we  ought  to  ask  Him 
the  privilege  of  serving,  with  all  our  heart  and  soul,  men. 
[Rising  applause.] 


THE  PRACTICAL  USE  OF  EXPLOSIVES  407 


THE  PRACTICAL  USE  OF  EXPLOSIVES  IN  MINING 
OPERATIONS 

Paper     Read    Before    American    Mining    Congress    at    St.    Louis    by 

R.  H.  SUMMER,  Technical  Division  of  the  E.  I.  Du  Pont- 

De  Nemours  &  Co. 

Look  about  the  room  you  are  now  in  or  most  any  place  you 
chance  to  be.  You  cannot  see  an  object  which  did  not  have  its 
original  source  either  from  under  the  ground  or  directly  or 
indirectly  from  growth  on  the  earth's  crust. 

While  explosives  are  used  in  increasing  quantities  each  year 
for  clearing  land,  sub-soiling,  drainage  and  planting  of  trees, 
it  is  the  explosives  used  for  mining  our  mineral  resources  that 
are  of  chief  interest  to  us. 

The  little  stick  of  dynamite  sinks  shafts  and  winzes,  drives 
tunnels  and  raises  into  the  ore  bodies,  and  then  opens  up  the 
stopes  to  get  the  ore  out  in  quantities. 

The  subject  of  this  paper,  as  suggested  by  your  Secretary, 
is  to  deal  with  explosives  for  mining  operations  from  a  prac- 
tical standpoint.  In  treating  the  subject  there  are  two  most 
important  phases.  Economy — because  especially  during  the 
present  high  cost  of  production  every  mining  man  has  lowest 
cost  per  ton  as  his  goal;  and  safety  in  the  use  of  explosives, 
both  from  a  humanitarian  and  economical  standpoint.  Much 
has  been  written  and  we  are  all  more  or  less  familiar  with  the 
high  cost  of  an  injured  workman  or  the  loss  of  life. 

Dynamite  Is  Made  to  Explode 

It  is  to  explode  with  the  maximum  disruptive  force  obtain- 
able for  any  given  type  and  strength.  Years  of  experience 
and  application  of  chemical  brains  has  produced  dynamites 
that  are  comparatively  safe  to  handle.  We  must  say  compara- 
tively safe  because  of  that  inherent  characteristic  which  makes 
them  safe  only  when  used  properly  and  with  the  Nth  degree 
of  precaution. 

It  is  our  duty  as  mining  men  to  see  that  high  explosives 
used  in  our  mines  do  only  the  work  for  which  they  are  intended. 
Dynamite  is  a  marvelous  workman  when  put  to  proper  use. 


408         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

But  when  mistreated  or  carelessly  handled  it  becomes  a  deadly 
destroyer  of  life  and  a  wasteful  wrecker  of  property. 

The  progress  that  has  been  made  of  recent  years  in  decreas- 
ing explosive  accidents  has  been  wonderful.  This  fact,  how- 
ever, should  add  an  impetus  to  our  efforts  and  not  a  slowing 
up,  because  even  with  statistics  showing  fewer  accidents  in 
handling  explosives — there  still  remains  much  to  be  done. 

I  think  I  may  safely  state  that  I  have  never  visited  a  mine 
where  there  has  not  been  some  violation  of  the  standard  safety 
precautions  for  use  in  handling  and  storing  explosives.  Many 
companies  make  a  special  effort  to  observe  every  rule,  but  the 
human  equation  is  present,  and  while  those  in  charge  are  out 
of  sight  the  miner  often  chooses  the  easy  way  and  not  the  safe 
one. 

Now,  how  is  maximum  safety  to  be  obtained?  There  is  a 
combination  of  three  ways.  First — education;  second — dis- 
cipline, and  third — proper  selection  of  explosives  and  blasting 
accessories. 

We  all  know  that  there  is  ample  room  for  education,  particu- 
larly for  the  unskilled  labor  where  initiative  is  usually  lacking. 
We  also  know  the  difficulty  of  such  education.  In  the  majority 
of  the  cases  of  violation  of  safety  precautions  it  is  not  igno- 
rance, but  rather  indifference  and  carelessness.  While  educa- 
tion is  necessary  and  has  its  effect,  it  is  rendered  useless  by 
this  indifference  and  carelessness  and  becomes  effective  only 
when  backed  by  the  strictest  discipline.  Mine  superintendents 
and  foremen  should  have  a  complete  knowledge  of  safety  pre- 
cautions. These  are  set  forth  in  detail  in  the  various  cata- 
logues and  literature  published  by  explosives  manufacturers. 

The  mine  superintendent  and  his  foremen  are  busy  men,  but 
so  is  the  army  captain  and  his  lieutenants.  No  matter  how 
lively  the  shells  are  falling  on  the  battle  field — discipline  must 
be  maintained.  It  is  always  maintained.  It  must  be  main- 
tained in  order  to  protect  our  armies  and  our  flag. 

Discipline  Necessary 

Discipline  in  using  explosives  is  just  as  important  to  the 
mining  companies  as  it  is  to  the  army.  Without  discipline 
safety  rules  are  violated  and  carelessness  results,  either  of 
which  becomes  a  liability  against  the  company,  for  an  accident 
may  come  any  time. 


THE  PRACTICAL  USE  OF  EXPLOSIVES  409 

Too  often  violations  are  overlooked  because  they  have  been 
practiced  repeatedly  without  disaster;  but  remember,  the 
fellow  who  brags  about  taking  this  or  that  chance  is  always 
the  lucky  one  whose  chance  did  not  result  in  an  accident.  The 
unfortunate  who  took  a  chance  and  caused  an  accident  to  hap- 
pen is  silent.  He  is  not  here  to  tell  us  of  the  time  he  took  a 
chance  and  the  "stuff  exploded." 

The  Institute  of  Makers  of  Explosives  has  a  standard  set  of 
precautions.  This  list  is  very  complete,  and  was  originally 
made  up  by  keeping  a  record  of  accidents  over  many  years 
in  America  and  from  reports  of  British  and  Canadian  accidents 
in  use  of  explosives. 

Should  an  accident  result  from  some  new  cause,  a  corre- 
sponding precaution  is  added  to  this  list.  This,  however,  is 
now  a  rare  occurrence,  as  an  accident  seldom  happens  that 
could  not  be  prevented  if  every  rule  is  observed. 

List  of  Don'ts 

This  list  contains  about  50  "DON'TS"  with  which  everyone 
handling  or  responsible  for  men  who  handle  explosives  should 
be  familiar.  Enforcement  of  these  rules  is  necessary  to  main- 
tain the  proper  discipline.  A  few  "INSISTS"  may  well  be 
directed  to  the  mining  company  officials. 

1.  INSIST  on  discipline.    (A  lay-off  is  no  worse  than  30  days 
in  the  guardhouse,  and  far  better  than  an  injured  man.) 

2.  INSIST  on  your  men  knowing  and  observing  every  pre- 
caution. 

3.  INSIST  on  proper  care  of  magazines. 

4.  INSIST  that  proper  warning  signal  be  observed  whenever 
firing  is  done  on  shift. 

5.  INSIST  on  an  examination  of  every  face  for  misfires 
before  allowing  next  shift  to  start  drilling.     (Remarks.) 

6.  INSIST  on  careful  transportation  on  underground  rail- 
roads or  in  cages. 

7.  INSIST  on  unused  dynamite  being  returned  to  the  maga- 
zine.   It  is  dangerous  laying  around  working  places. 

These  are  just  a  few  points  which  would  help  to  insure 
proper  use  of  explosives. 

I  have  referred  to  the  reduced  number  of  accidents  of  recent 
years.  Safety-first  campaigns  have  had  an  important  role  in 


410         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

reducing  the  number  of  accidents.  Along  with  this  good  work 
the  modern  types  of  dynamites,  much  safer  to  handle,  have 
contributed  in  a  very  great  degree  and  are  largely  responsible 
for  fewer  accidents.  I  refer  particularly  to  the  low-freezing 
ammonia  and  low-freezing  gelatin  dynamites.  The  low-freez- 
ing feature  is  in  itself  a  most  important  one,  as  it  eliminates 
the  many  dangers  involved  in  thawing  dynamite.  Even  a  short 
memory  can  recall  how  common  it  was  a  few  years  ago  to  see 
miners  "wearing"  sticks  of  dynamite  in  their  boots  or  other- 
wise engaged  about  their  clothing  in  order  for  it  to  thaw. 
Many  a  cook  stove,  boiler  room  and  even  the  gathering  place 
of  a  bunch  of  workmen  around  a  bonfire  has  been  scattered  in 
pieces  by  explosions,  caused  by  thawing  out  dynamite  which 
used  to  freeze  long  before  we  really  felt  the  chill  of  winter. 
The  low-freezing  dynamites  of  today  will  ordinarily  stand  any 
of  the  average  cold  temperatures  that  we  have  in  this  country. 

Along  with  this  very  important  feature  the  ammonia  and 
gelatin  dynamites  have  the  characteristic  property  of  being 
much  less  sensitive  than  the  straight  dynamites.  They  are, 
therefore,  less  liable  to  detonation  from  hard  tamping  in  bore 
holes,  from  becoming  pinched  between  rock  fragments  or  from 
shocks  received  in  transportation  or  rough  usage. 

Both  the  ammonia  and  gelatin  dynamites  are  difficult  to 
ignite,  the  ammonia  more  so  than  the  gelatin.  It  is  especially 
difficult  to  ignite  the 'ammonia  dynamite  from  the  side  spit  of 
burning  fuse.  This  is  important,  in  that  it  lessens  the  chance 
of  a  dynamite  charge  burning  in  the  bore  hole.  Dynamites 
which  give  off  almost  no  poisonous  gases  when  completely 
detonated  produce  very  poisonous  gases  when  burned.  A 
record  of  tests  which  showed  practically  no  C.  0.  or  N.  0.  after 
complete  detonation  showed  13.7  per  cent.  C.  0.  and  11.9 
per  cent,  nitrogen  oxides  when  burned.  This  illustrates  the 
importance  of  complete  detonation  and  precaution  against 
burning  dynamite  in  underground  work.  The  fumes  given  off 
from  either  the  ammonia  type  or  gelatin  type  dynamites  are 
very  much  better  than  from  the  straight  dynamite. 

Safety  in  Electric  Firing 

Safety  is  only  one  of  the  many  desirable  features  of  electric 
firing.  Isn't  it  a  source  of  great  satisfaction  to  know  that  all 


THE  PRACTICAL  USE  OF  EXPLOSIVES  411 

men  are  out  of  the  mine  and  perhaps  on  their  way  home  before 
firing  takes  place?  Particularly  in  shaft  work,  where  the 
failure  of  a  signal  or  many  other  possibilities  may  cause  a 
serious  accident.  Electric  firing  eliminates  these  dangers,  as 
the  firing  is  under  the  control  of  one  man,  who  pushes  the  blast- 
ing machine  from  a  safe  distance  when  all  persons  are  away 
from  range  of  the  shot.  Likewise  in  tunnel  work  or  stope 
work,  if  the  charges  are  fired  electrically  there  is  not  the 
attendant  danger  to  the  miner  that  exists  when  firing  with 
cap  and  fuse.  In  the  latter  case  he  is  an  unfortunate  victim 
if  his  light  fails  him.  He  is  naturally  in  a  hurry  and  probably 
nervous,  and  a  fall  over  a  broken  stope  or  down  ladder  ways 
is  much  more  liable  to  occur  because  of  nervousness  and  haste. 

Electric  firing  eliminates  hang-fires — one  of  the  most  prolific 
sources  of  serious  accidents. 

In  close  work  where  ventilation  is  poor  the  poisonous  gases 
evolved  from  burning  fuse  are  often  sufficient  to  be  of  conse- 
quence. These  gases  are  eliminated  and  better  working  con- 
ditions result  when  electric  firing  is  employed. 

The  make-up  of  electric  blasting  caps  is  such  that  none  of 
the  explosive  charge  is  exposed.  This  affords  protection 
against  sparks ;  the  element  of  danger  in  crimping  caps  to  fuse 
as  well  as  the  dangerous  and  improper  practice  of  crimping 
with  teeth  is  eliminated. 

The  modern  electric  blasting  machine  is  about  as  fool  proof 
and  safe  as  can  be  made.  Many  accidents  happen  in  electric 
firing  by  use  of  dry  cells  or  storage  batteries,  the  reason,  of 
course,  being  that  the  instant  the  terminals  come  in  contact 
with  the  battery  posts  the  current  passes  through  and  the 
blast  is  fired.  Only  last  month  a  representative  of  an  explo- 
sives company  suffered  a  severe  accident  because  a  miner  to 
whom  he  was  talking  accidentally  allowed  the  wires  of  an 
electric  blasting  cap  to  engage  his  storage  battery.  In  this 
case  the  injured  man  was  one  who  no  doubt  condemned  the 
practice. 

The  safest  blasting  machine  is  not  a  battery  nor  a  magneto, 
although  often  so  called.  It  is  really  a  small  dynamo,  the 
armature  being  rotated  by  a  down  plunge  of  the  rack  bar.  The 
little  dynamo  has  electro-magnets  specially  wound  so  that  the 
current  is  shunted  through  the  field  magnets.  Thus  the  cur- 


412         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

rent  is  built  up  and  intensified  to  a  maximum  when  the  rack 
bar  closes  the  circuit  at  the  end  of  the  stroke  and  releases  the 
full  power  through  the  blasting  circuit  in  one  surge.  The 
safety  feature  of  this  machine  needs  no  explanation,  for  it  is 
clear  that  there  is  no  live  current  existing  to  accidentally 
cause  a  premature  explosion  until  the  bar  is  plunged,  and  it 
requires  a  man-sized  plunge  at  that,  because  the  resulting 
current  is  purely  a  conversion  of  mechanical  energy  into  elec- 
trical energy. 

Tested  Blasting  Caps 

No  matter  how  carefully  electric  blasting  caps  are  tested 
and  inspected  before  leaving  the  manufacturer's  hands,  there 
are  liable  to  be  defects  which  arise  before  the  caps  are  put  to 
use.  The  bridge  wire  which  fuses  and  causes  the  detonator 
to  explode  is  extremely  fine  and  may  become  broken  if  not  han- 
dled with  care.  In  order  to  insure  safety  and  surety,  electric 
blasting  caps  should  be  tested  before  being  put  into  use  and 
the  circuit  should  be  tested  before  firing.  Several  accidents 
are  on  record  from  the  use  of  improper  testing  instruments. 
A  safe  testing  battery  has  been  devised  which  has  been  exten- 
sivly  used  and  has  never  been  known  to  fire  an  electric  blasting 
cap.  This  is  known  as  the  Galvonometer,  and  is  a  magnetic 
device  which  moves  a  pointer  across  a  calibrated  scale  when  a 
circuit  is  closed  between  the  binding  posts.  The  current  is 
supplied  from  a  small  silver  chloride  cell.  With  this  Galvo- 
nometer individual  caps  can  be  tested,  or  the  entire  circuit  can 
be  tested  for  detecting  breaks,  short  circuits  or  leaks,  thus 
facilitating  exacting  methods  and  assurance  of  a  complete 
detonation  of  all  charges.  Herein  lies  the  great  value  of  the 
Galvonometer,  as  these  exacting  methods  minimize  danger 
and  lessen  the  risk  of  failures  and  accidents. 

In  the  foregoing  I  have  touched  upon  a  few  important  safety 
helps.  A  detailed  discussion  would  occupy  more  of  your  time 
than  I  desire  to  take.  However,  if  what  has  been  brought  to 
your  attention  will  create  a  desire  to  seek  the  knowledge  of 
details  which  are  necessary  to  accident  prevention  in  handling 
explosives,  then  I  am  sure  we  will  all  be  well  repaid  for  our 
time. 

In  taking  up  economy  in  the  xzse  of  explosives  there  are  some 


THE  PRACTICAL  USE  OF  EXPLOSIVES  413 

fundamental  principles  to  be  observed.  At  the  same  time, 
hard  and  fast  rules  cannot  be  laid  down.  A  limestone  here 
breaks  vastly  different  from  a  limestone  in  another  locality. 
The  character  of  material  to  be  blasted,  ventilation,  size,  depth 
and  placing  of  bore  holes,  operations  wet  or  dry,  methods  of 
mining  and  practice,  all  have  a  bearing  upon  the  selection  of 
the  most  economical  explosive. 

Taking  the  character  of  material  blasted  in  general,  it  may 
be  said  that  a  stronger  explosive  is  required  for  igneous  rocks 
than  for  the  sedimentaries.  Blasting  in  a  hard,  dense,  homo- 
geneous rock  deposit  requires  a  brusque,  shattering  action, 
while  a  stratified  formation  with  partings  and  slips  will  usually 
break  with  better  results  when  a  slower  explosive  with  a 
heaving  action  is  used. 

Question  of  Ventilation 

Ventilation  (if  it  is  very  poor)  sometimes  limits  the  selection 
of  the  most  economical  explosive.  Gelatin  dynamites  produce 
the  least  fumes  and  are  used  in  the  case  of  poor  ventilation. 
In  many  cases  an  ammonia  type  dynamite  would  give  equally 
good  results  at  a  cheaper  cost,  and  I  have  seen  places  where 
a  saving  could  be  made  even  at  the  increased  cost  of  operating 
adequate  blowers  for  ventilation. 

The  water-resisting  qualities  of  gelatin  dynamite  are  A-l, 
and  in  very  wet  work  gelatin  dynamite,  with  an  electric  primer, 
will  give  the  surest  result. 

The  low-freezing  dynamites  have  been  referred  to  in  regard 
to  safety.  They  are  also  very  economical  indeed,  for  a  frozen 
dynamite  or  even  a  chilled  dynamite  does  not  exert  its  full 
force  when  detonated  and  often  will  not  detonate. 

The  ability  of  dynamite  to  do  work  is  solely  dependent  on 
the  rapid  conversion  of  a  solid  into  great  volumes  of  gases, 
and  can  only  exert  its  maximum  force  when  strongly  confined, 
allowing  none  of  the  gases  to  escape  from  the  bore  hole.  Firing 
untamped  bore  holes  is  extravagant  as  well  as  detrimental  to 
the  workmen.  The  minimum  amount  of  fumes  is  given  only 
upon  complete  detonation,  which  is  virtually  impossible  in 
untamped  holes.  If  tamping  material  is  not  available  under 
ground,  tamping  bags  can  be  filled  with  a  suitable  material  on 
the  surface. 


414         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Electric  Igniters 

In  most  all  mining  work  shots  are  fired  in  rotation,  each 
shot  being  dependent  upon  the  previous  one  for  its  proper 
execution.  Improper  rotation  or  a  misfire  in  one  spoils  all  the 
succeeding  shots.  Not  only  is  the  cost  of  the  explosive  charges 
lost,  but  also  the  labor  and  redrilling  costs  as  well  as  the  ton- 
nage. Electric  blasting  caps  and  electric  delay  igniters  are 
made  so  as  to  give  almost  any  delay  desired.  While  initial 
cost  of  electric  blasting  is  higher  than  the  cost  of  cap  and  fuse, 
the  sureness  and  greater  efficiency  will  often  more  than  com- 
pensate. 

High  explosives  are  made  in  several  types  and  of  almost  any 
strength  desired,  all  of  which  possess  different  characteristics 
either  in  velocity  of  detonation,  water  resistance,  density, 
fumes  or  freezing  qualities. 

Thus  the  selection  of  the  most  economical  explosives  for  any 
operation  is  largely  a  matter  of  carefully  conducted  tests.  The 
value  of  making  such  tests  has  been  realized  to  a  great  degree 
during  the  past  few  years,  since  prices  of  all  commodities 
started  to  soar.  Some  splendid  results  have  been  made,  show- 
ing costs  reduced  in  a  greater  proportion  than  the  advance  in 
the  initial  cost  of  the  explosives. 


PHYSICAL  EFFICIENCY  415 


PHYSICAL  EFFICIENCY— ITS  EFFECTS  ON 
PRODUCTION 

By  E.  DANA  CAULKINS,  Manager,  National  Physical  Education 
Service,  Washington,  D.  C. 

The  announcement  of  an  address  upon  physical  fitness  has 
doubtless  led  you  to  expect  the  presentation  of  some  new- 
fangled short  cut  to  health  and  efficiency.  You  have,  perhaps, 
been  thinking  that  I  would  outline  a  special  course  in  diet  or  a 
special  system  in  daily  exercise,  but  the  solution  of  the  problem 
of  100  per  cent,  human  efficiency  is  not  so  simple.  In  the  few 
brief  moments  that  are  available,  however,  I  hope  to  stress 
the  importance  of  physical  fitness  and  make  a  few  practical 
suggestions,  which  can  be  used  in  meeting  your  every-day 
problems. 

I  have  been  very  much  interested  in  observing  in  this  build- 
ing the  splendid  display  of  modern  devices  aimed  to  simplify 
and  increase  production,  but  in  all  seriousness  I  wish  to  ask 
you  whether  it  is  not  true  that  the  most  difficult  problem 
you  are  facing  today  is  that  of  insuring  the  dependable  con- 
tinuous working  force.  In  other  words,  no  machine  has  as  yet 
been  invented  that  will  run  itself,  and  in  the  final  analysis 
human  efficiency  is  the  most  important  factor  in  production, 
and  I  wish  to  submit  to  you  the  further  question — whether 
it  is  not  true  that  one  of  the  fundamental  elements  in  human 
efficiency  is  physical  fitness.  This  would  appear  to  be  the 
rock-bottom  foundation  upon  which  depend  all  other  elements 
in  the  solution  of  the  problem  of  human  efficiency.  I  have 
recently  seen  some  very  startling  figures  on  the  value  of  the 
time  lost  every  year  because  of  ill  health.  These  figures  take 
no  account  of  the  lowered  efficiency  of  men  dragging  along  on 
the  job  in  an  impaired  physical  condition;  but  inaccurate  as 
they  were,  they  drove  home  to  me  the  tremendous  importance 
of  conserving  and  promoting  health  and  physical  efficiency. 

Physical  Education  Promotes  Stability 

But  physical  education  does  more  than  keep  men  out  of  the 
hands  of  the  doctor  and  able  to  use  their  muscles  in  the  per- 


416         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

formance  of  their  particular  tasks.  Physical  education  makes 
a  very  direct  contribution  to  mental  ability  and  moral  stability. 
I  never  yet  saw  a  chronic  grouch  who  was  100  per  cent, 
physically  fit.  I  never  yet  heard  an  insane,  unhealthy,  un- 
American  social  doctrine  proceeding  from  the  mouth  of  a  man 
physically  fit.  You  will  find  that  in  ninety-nine  cases  out  of 
a  hundred  our  social  and  moral  runts  are  also  our  physical 
runts;  anarchistic,  knife-sticking,  bomb-throwing  doctrines 
can  be  housed  comfortably  only  in  stunted,  mis-shapen  bodies. 
Can  you  picture  a  successful  athlete,  whether  you  find  him  in 
the  "sand  lot"  league  or  in  the  college,  sneaking  around  de- 
manding the  forcible  overthrow  of  the  Government  and  a 
shake-up  in  the  social  system  to  give  him  a  better  chance  at 
earning  a  living?  You  are  more  likely  to  find  him  rolling  up 
his  sleeves,  ready  for  all  comers  in  the  struggle  for  success 
and  advancement.  Do  not  misunderstand  me,  I  am  not  arguing 
that  the  development  of  physical  fitness  will  solve  all  the  con- 
troversies between  the  employer  and  employee  and  still  the 
voice  of  labor  in  the  legitimate  efforts  to  improve  working 
conditions  and  secure  a  larger  share  in  the  fruits  of  toil ;  but 
I  do  say  that  the  man  who  is  physically  fit  has  a  decided 
advantage  in  functioning  sanely  and  successfully  either  as  an 
employer  or  as  an  employee. 


Efficiency  Decreasing 

Now,  perhaps  it  will  surprise  you  to  know  that  physical  effi- 
ciency is  decreasing  in  this  country  today — that  in  spite  of  all 
the  wonderful  progress  in  sanitation  and  the  treatment  of 
disease,  we,  as  a  nation,  are  actually  on  the  downward  grade 
physically.  For  instance,  a  study  of  the  vital  statistics  in 
Massachusetts  shows  that  during  the  past  25  years  the  death 
rate  from  organic  disease  has  increased  86  per  cent.  By 
organic  disease  we  refer  to  the  affection  of  the  heart,  liver, 
lungs  and  other  vital  organs  upon  which  inroads  are  very 
gradually  and  insidiously  made  through  lack  of  exercise,  im- 
proper eating  and  sleeping  and  other  disregard  of  health  habits. 
The  report  of  the  provost  marshal  general  for  1918  reveals 
that  for  every  two  men  who  marched  down  our  streets  into  the 
training  camps  and  overseas  for  the  defense  of  liberty,  one 
man  was  set  aside  disqualified  for  full  military  service. 


PHYSICAL  EFFICIENCY  417 

Among  many  reasons  there  is  one  fundamental  explanation 
to  this  tendency  to  physical  degeneration.  During  the  past 
century  our  habits  of  life  have  rapidly  changed,  whereas  the 
human  body  has  changed  very  little.  In  the  former  days  the 
necessary  activities  involved  in  securing  food  and  shelter 
brought  incidentally  the  regulation  of  diet,  rest  and  physical 
activity  needed  to  insure  health  and  physical  efficiency.  The 
rapid  development  of  mechanical  devices  has  pushed  us  into  a 
manner  of  living  for  which  our  bodies  are  not  at  all  suited. 
The  most  fundamental  requirement  in  health  is  that  the  body 
be  used,  but  we  have  become  a  nation  of  button  pushers  and 
lever  pullers,  toted  around  by  gasoline  explosions,  thus  depriv- 
ing ourselves  of  the  physical  activity  essential  to  health. 

Now,  in  order  to  stem  this  tide  we  are  obliged  to  use 
artificial  means.  We  must  construct  the  dikes  and  levees 
which  will  swing  our  daily  habits  into  channels  conserving  the 
health  and  physical  vigor  of  our  bodies.  The  fundamentals 
for  physical  fitness  are  proper  nourishment,  proper  rest  and 
proper  activities.  The  drive  of  the  demands  of  modern  life  is 
constantly  pushing  us  toward  improper  eating,  improper  sleep- 
ing and  inadequate  exercise.  Now,  briefly,  what  are  the  prac- 
tical suggestions  which  I  can  make  to  you  men?  You  are 
bound  to  be  interested  in  physical  education.  First,  on  your 
own  personal  account.  You  do  not  need  to  be  told  what  to  do. 
Your  newspapers  and  magazines  are  full  of  health  advice  and 
health  instructions.  I  can  only  urge  you  to  do  it.  Nature 
has  been  very  generous.  She  doesn't  demand  a  100  per  cent, 
adherence  to  the  well-known  rules  for  health  and  physical  fit- 
ness. If  you  will  follow  even  in  a  50  per  cent,  way  the  rules 
which  you  yourself  already  know  and  you  ought  to  follow,  you 
will  be  in  the  way  of  filling  out  your  three-score  and  ten  of 
happy  effective  life. 

Employer's  Duty  to  Workers 

Now,  you  are  also  bound  to  be  interested  in  promoting  the 
physical  fitness  of  your  employees.  Most  of  you  have  probably 
discovered  that  the  hardest  thing  in  the  world  for  an  employer 
is  to  be  helpful  to  his  employee.  Millions  of  dollars  have  been 
wasted  by  employers  in  the  construction  of  various  kinds  of 
apparatus  aimed  to  promote  the  health  and  physical  fitness  of 


418         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

employees.  My  own  personal  conviction  in  this  matter  is  that 
these  efforts  at  helpfulness  should  very  largely  be  transferred 
from  the  plant  to  the  community.  Now,  I  realize  that  the 
great  majority  of  you  employers  do  not  live  in  the  communi- 
ties where  the  employees  live,  but  presume  it  is  safe  to  say 
that  most  of  you  have  a  means  of  influencing  the  development 
of  these  communities — at  least  to  the  extent  of  preventing 
exorbitant  taxation  of  the  mine  properties.  Is  it  not  possible 
through  the  same  means  to  stimulate  the  development  of 
public  facilities  and  public  leadership  in  order  to  give  the 
employees  the  opportunity  for  participation  in  activities  which 
promote  health  and  happiness?  There  are  doubtless  some 
facilities,  such  as  shower  baths  and  the  opportunity  for  change 
of  clothing,  which  should  be  located  at  the  mines,  but  I  am 
inclined  to  believe  that  if,  for  instance,  the  construction  of  a 
recreation  building  is  contemplated,  the  employees  will  be  more 
likely  to  use  the  building  to  advantage  if  they  have  had  a 
chance  to  vote  on  the  issue  of  bonds  for  its  construction  and 
help  in  determining  whether  it  should  be  painted  white  or  red. 
Such  facilities  should  ultimately  be  controlled  by  the  proper 
public  officials.  In  many  cases  it  may  be  wise  to  have  the 
undertaking  temporarily  started  by  a  voluntary  representative, 
non-sectarian  local  community  organization,  such  as  is  being 
promoted  by  Community  Service,  Incorporated. 


Appeal  to  Employers 

Now,  I  don't  want  you  to  have  the  mistaken  idea  that  I 
expect  what  I  am  saying  here  today  will  have  any  very  great 
effect  in  promoting  the  physical  fitness  of  mining  operators  or 
miners.  Your  habits  are  pretty  well  fixed.  The  demands  of 
modern  life  have  already  driven  you  into  a  manner  of  living 
which,  with  a  few  exceptions,  you  will  probably  follow  to  the 
end.  But  there  is  some  hope  in  the  rising  generation  and  just 
for  a  moment  I  want  to  appeal  to  you,  not  from  the  standpoint 
of  your  own  welfare,  nor  from  the  standpoint  of  the  welfare 
of  your  employees.  I  want  to  appeal  to  you  on  behalf  of  the 
children  of  America  whose  habits  are  not  yet  formed.  If 
artificial  influences  are  not  set  in  motion,  the  demands  of 
modern  life  will  draw  them  gradually  into  a  manner  of  living 
to  which  their  bodies  are  not  at  all  adapted.  Why  not  put  into 


PHYSICAL  EFFICIENCY  419 

every  school  in  the  country  a  program  which  will  give  them 
practical  instruction  in  the  principles  of  healthful  living  and 
which  will  organize  them  into  activities  that  will  promote 
health  and  normal  physical  development?  A  responsible 
national  committee  which  has  made  a  study  of  the  various 
investigations  into  the  health  of  school  children  reports  that 
75  per  cent,  of  the  school  children  of  the  country  are  suffering 
from  physical  defects  which  seriously  impede  mental  and 
physical  development.  They  include  in  that  number  those 
having  defective  teeth.  Surely  if  the  function  of  the  school 
is  to  train  children  for  effective  living,  the  first  step  is  to  train 
the  children  in  habits  which  will  give  them  the  necessary 
physical  foundation.  You  are  all  men  who  have  some  influ- 
ence directly  or  indirectly  in  your  State  Legislature.  I  appeal 
to  you  as  good  citizens  to  use  your  influence  in  securing  the 
establishment  of  thorough-going  physical  education  in  all  the 
schools  of  your  State.  You  may  be  interested  to  know  that 
13  of  the  States  have  already  taken  progressive  steps  in  the 
direction  of  meeting  this  need.  The  National  Physical  Edu- 
cation Service  aims  to  help  focus  the  influence  of  all  interested 
individuals  and  organizations  in  the  passage  of  progressive 
physical  educational  legislation.  It  makes  no  difference 
whether  you  are  discussing  increased  production  in  industry 
or  any  one  of  a  hundred  other  national  problems,  you  will  find 
that  the  heart  of  the  problem  is  the  need  for  increased  human 
efficiency,  and  you  will  find  that  the  rock-bottom  foundation 
of  human  efficiency  is  physical  fitness. 


420         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  OIL  FLOTATION  SITUATION 

Address  by  GEORGE  L.  NYE,  of  Denver,  Before  The  American  Mining 
Congress,  St.  Louis,  Mo. 

Any  consideration  of  the  general  subject  of  the  recovery  of 
metals  by  oil  flotation  naturally  divides  itself  into  three  heads : 
I.  Past  History.  II.  Present  Predicament.  III.  Future  Out- 
look. 

The  history  of  the  discovery  of  the  peculiar  affinity  of  oil 
for  metal,  as  distinguished  from  gangue,  in  the  mass  of  ore 
is  so  much  a  matter  of  every  day  knowledge  that  it  would  be 
like  "carrying  coals  to  Newcastle"  for  me  to  undertake  to  re- 
peat it  to  those  who  are  probably  more  familiar  with  it  than  I. 

The  history  of  Minerals  Separation,  Ltd.,  is  quite  a  different 
matter,  even  more  interesting  and  not  by  any  means  so  well 
known.  I  shall  refer  to  some  of  it  for  your  enlightenment  and, 
I  trust,  to  your  advantage. 

A  British  Corporation 

Minerals  Separation,  Ltd.,  was  organized  under  the  British 
Companies  Act  in  December,  1903,  and  its  charter  is  sufficiently 
broad  to  permit  it  to  do  practically  everything  under  the 
shining  sun  except  practice  medicine  or  preach  the  gospel,  but 
it  soon  became  manifest  that  it  was  intended  for  a  particular 
line  of  endeavor,  and  its  paths  since  then,  although  devious, 
have  been  well  defined,  and  its  trail  on  the  heels  of  the  mining 
industry,  which  it  has  stalked  from  the  beginning  of  its  career, 
is  well  marked  and  unbroken. 

In  August,  1910,  Minerals  Separation,  Ltd.,  caused  Minerals 
Separation  American  Syndicate  to  be  organized  to  acquire  a 
two-year  option  on  certain  patent  rights  for  the  United  States, 
Canada  and  North  America,  the  Caribbean  Sea  countries  gen- 
erally, including  Mexico  and  Cuba. 

A  month  later  this  concern  and  Minerals  Separation,  Ltd., 
the  parent  company,  entered  into  an  agreement  to  organize 
a  third  company  to  purchase  these  patent  rights.  This  com- 
pany was  actually  organized  as  Minerals  Separation  American 


THE  OIL  FLOTATION  SITUATION  421 

Syndicate,  1913,  and  did  later  acquire  and  exploit  these  patent 
rights. 

Immediately  after  the  organization  of  Minerals  Separation, 
Ltd.,  as  disclosed  by  the  records,  Sir  Robert  M.  Kindersley  and 
Mr.  Emil  Pusch  became  large  and  prominent  stockholders. 

Sondheimer  Interests  in  Control 

Albert  Sondheimer,  of  Beer,  Sondheimer  &  Co.,  which  in 
1910  controlled  the  zinc,  lead  and  spelter  market  of  the  world, 
was  one  of  the  original  directors  of  Minerals  Separation  Ameri- 
can Syndicate,  and  in  the  third  or  purchasing  company  Nathan 
Sondheimer  was  a  director  and  Emil  Beer  an  alternate  director. 
In  this  third  company  Kindersley  &  Pusch  were  the  largest, 
and  Beer,  Sondheimer  &  Co.  the  second  largest,  stockholders. 

How  did  these  German  interests  get  this  control  of  English 
companies?  Probably  because  the  first  considerable  develop- 
ment and  use  of  flotation  was  in  connection  with  the  lead  and 
zinc  mines  of  Australia,  where,  at  the  time,  the  entire  output 
was  absolutely  controlled  by  Beer,  Sondheimer  &  Co. 

The  history  of  the  struggle  of  Australia  to  throw  off  the 
yoke,  and  the  years  of  resultant  litigation,  which  only  ended 
with  drastic  legislation  forbidding  any  but  British  subjects  to 
deal  in  lead  and  zinc,  would  make  a  chapter  by  itself,  for  which 
there  is  no  room  here. 

In  June,  1913,  Minerals  Separation  American  Syndicate,  1913, 
was  incorporated,  and  in  the  following  September  it  made  an 
agreement  with  Beer,  Sondheimer  &  Co.,  appointing  the  latter 
sole  agents  in  the  United  States,  for  all  the  patent  rights  of 
Minerals  Separation  American  Syndicate,  1913. 

We  might  pause  here  to  remark  that  the  first  suit  in  the 
United  States — Minerals  Separation  vs.  Hyde — was  brought 
in  1911  and  alleged  ownership  in  Minerals  Separation,  not- 
withstanding the  option  held  by  Minerals  Separation  American 
Syndicate  and  the  contract  of  1910  to  organize  a  corporation 
to  acquire  title  to  the  patents  in  America. 

Germans  in  Control 

Beer,  Sondheimer  &  Co.  operated  as  sole  agents  of  Minerals 
Separation  in  the  United  States  at  least  until  the  outbreak  of 
the  European  War,  and  probably  for  quite  a  time  thereafter. 


422         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

During  the  war,  the  existence  of  the  contract  undoubtedly 
caused  grave  concern  to  Minerals  Separation,  and  many  efforts 
were  made  to  avoid  violating  the  British  "Trading  with  the 
Enemy  Act,"  but  through  an  unwillingness  of  the  American 
representatives  of  Beer,  Sondheimer  &  Co.  and  the  hesitation 
of  Minerals  Separation  to  take  advantage  of  the  termination 
of  the  Beer,  Sondheimer  &  Co.  contract,  by  the  declaration  of 
war  between  England  and  Germany,  only  such  changes  as  were 
absolutely  necessary  to  screen  the  real  situation  were  made. 

Explaining  to  British 

Not  until  November,  1916,  were  the  internal  agonies  of  this 
German-controlled  British  concern  for  the  three  preceding 
years  made  known  by  the  filing,  in  Somerset  House,  of  a  con- 
tract dated  August  4,  1916,  between  Minerals  Separation 
American  Syndicate,  1913,  first  party;  John  Ballot  as  pur- 
chasing trustee,  second  party,  and  Benno  Elkan  and  Otto 
Frohnknecht,  described  as  doing  business  as  Beer,  Sondheimer 
&  Co.,  American  Branch,  third  parties  and  beneficiaries. 

The  agreement  recites  the  ownership  by  Minerals  Separation 
American  Syndicate,  1913,  of  the  patent  rights  already  men- 
tioned, the  contract  appointing  Beer,  Sondheimer  &  Co.  sole 
agents  for  America  on  a  commission  basis,  and  then  follows  a 
recital  that  "by  instrument  of  declaration  and  guarantee  exe- 
cuted by  the  agents" — i.  e.,  by  Elkan  and  Frohnknecht — on 
October  5,  1914,  it  was  declared  that  the  original  agency  con- 
tract had  been  performed  on  the  part  of  Beer,  Sondheimer 
&  Co.  exclusively  by  Elkan  and  Frohnknecht,  and  that  the 
only  benefits  that  had  arisen  to  Beer,  Sondheimer  &  Co.,  of 
Frankfort,  or  Beer,  Sondheimer  &  Co.,  American  Branch,  had 
been  commissions  on  royalties  paid  over  to  Minerals  Separa- 
tion American  Syndicate,  1913;  that  deduction  of  such  com- 
missions had  been  discontinued  prior  to  the  war  and  had  not 
been  resumed;  that  in  order  to  eliminate  all  questions  as  to 
enemy  character  of  Elkan  and  Frohnknecht  and  for  the  pur- 
pose of  allowing  Minerals  Separation  American  Syndicate, 
1913,  to  continue  trade  relations  with  them,  they  undertook 
that  they  would  not  pay,  directly  or  indirectly,  anything  of 
value  arising  from  their  connection  with  Minerals  Separation 
American  Syndicate,  1913,  to  Beer,  Sondheimer  &  Co.,  and 


THE  OIL  FLOTATION  SITUATION  423 

would  not  deduct  any  commissions  in  any  event  until  after 
the  close  of  the  war,  and  that  trade  relations  between  Minerals 
Separation  American  Syndicate,  1913,  and  Elkan  and  Frohn- 
knecht  should  be  to  the  entire  exclusion  of  Beer,  Sondheimer 
&  Co. 

The  agreement  goes  on  to  recite  that,  subsequent  to  the 
delivery  of  the  alleged  instrument  of  declaration  and  guaranty, 
the  original  agency  contract  was  superseded  by  a  contract 
entered  into  between  Minerals  Separation  American  Syndicate, 
1913,  and  Elkan  and  Frohnknecht  on  January  6,  1915,  in  which 
Elkan  and  Frohnknecht  were  appointed  sole  agents  of  Minerals 
Separation  American  Sndicate,  1913,  in  America  and  the  Philip- 
pine Islands,  for  the  purpose  of  exploiting  the  patents. 


Question  of  Record 

It  is  worthy  of  note  that  the  alleged  agreement  of  January 
6,  1915,  did  not  appear  on  record  in  Somerset  House  in  Novem- 
ber, 1916,  at  the  time  the  contract  of  August  4,  1916,  was 
filed — in  fact,  so  far  as  our  present  information  goes,  it  has 
never  appeared  on  the  public  records.  In  April,  1915,  during 
the  progress  of  the  trial  of  Minerals  Separation,  Ltd.,  against 
Miami  Copper  Company,  in  the  United  States  District  Court 
in  Delaware,  for  alleged  infringement  of  plaintiff's  process 
patents,  plaintiff,  on  April  5,  put  on  the  stand  one  Harry 
Falck,  who  testified: 

"I  reside  in  New  York  and  am  general  office  manager  of 
Beer,  Sondheimer  &  Co." 

When  asked,  "Beer,  Sondheimer  &  Co.  stand  in  what  rela- 
tion to  Minerals  Separation,  Ltd.,  or  Minerals  Separation 
American  Syndicate,  1913,  Ltd.  ?  Mr.  Falck  replied :  "They  are 
agents  for  the  Minerals  Separation  American  Syndicate,  1913, 
Ltd.,  for  North  America,  Cuba,  including  the  West  Indies." 
When  asked  if  "It  is  a  part  of  your  duty,  as  office  manager  for 
Beer,  Sondheimer  &  Co.,  to  be  familiar  with  the  granting  of 
licenses  and  the  payment  of  royalties  under  licenses  in  regard 
to  Minerals  Separation,  Ltd.,  patents?"  Mr.  Falck  replied: 
"Yes,  sir." 

Mr.  Falck  then  testified  that  the  books  of  original  entry  of 
Beer,  Sondheimer  &  Co.  were  prepared  under  his  supervision 
and  checked  by  him.  When  asked  if  "In  the  ordinary  course 


424         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  business  the  check  comes  in  to  Beer,  Sondheimer  &  Co.?" 
Mr.  Falck  replied:  "Yes,  mostly." 

Q.     "If  not,  the  payment  is  noted  by  Beer,  Sondheimer  & 

Co.?'" 

A.    "Yes,  that  is  it." 

Bearing  in  mind  that  all  these  questions  were  asked  by  coun- 
sel for  Minerals  Separation,  Ltd.,  it  is  plain  that  the  witness 
intended  to  state  that  as  late  as  April  5,  1915,  Beer,  Sond- 
heimer &  Co.  were  in  fact  acting  as  agents  for  Minerals 
Separation,  Ltd.,  and  Minerals  Separation  American  Syndicate, 
1913,  Ltd.,  and  an  exhibit  which  he  put  in  evidence,  prepared 
by  him,  entitled  "Statements  of  Accounts  of  Royalties  of  Min- 
erals Separation,  Ltd.,"  shows  payments  collected  by  Beer, 
Sondheimer  &  Co.  as  late  as  March  8,  1915,  and  amounting  to 
thousands  of  dollars. 

In  view  of  this  testimony,  it  would  seem  to  be  a  matter  of 
some  question  whether  recitals  in  the  agreement  of  August  4, 

1916,  to  the  effect  that  the  relationship  with  Beer,  Sondheimer 
&  Co.  had  terminated  in  1914,  were  entirely  correct. 

New  American  Citizens 

The  naturalization  records  in  New  York  show  that  Otto 
Frohnknecht  was  born  in  Frankfort,  came  to  the  United  States 
June  10,  1906,  and  had  continuously  resided  in  the  United 
States  up  to  the  time  that  he  made  his  first  declaration  of 
intention  to  become  an  American  citizen,  on  August  4,  1914, 
the  very  day  of  the  declaration  of  war  between  Great  Britain 
and  Germany.  He  was  admitted  to  citizenship  on  February  6, 

1917.  The  same  records  show  that  Benno  Elkan  was  born  in 
Frankfort,  came  to  New  York  June  7,  1906,  made  his  first 
declaration  February  11, 1915,  and  was  admitted  to  citizenship 
on  May  22,  1917. 

The  records  in  the  office  of  the  Secretary  of  State  of  the 
State  of  New  York  show  that  August  26,  1915,  a  company  was 
incorporated,  under  the  corporate  title  of  Beer,  Sondheimer  & 
Co.,  Inc.,  with  its  principal  place  of  business  in  New  York  City, 
with  Benno  Elkan,  Otto  Frohnknecht,  Harry  Falck,  James  A. 
Nelson  and  William  A.  Cooper  as  its  directors  for  the  first  year. 
Elkan  was  president,  Frohnknecht  vice-president,  and  Nelson 
secretary.  The  name  of  this  corporation  is  nowhere  mentioned 


THE  OIL  FLOTATION  SITUATION  425 

in  any  of  the  agreements  with  Minerals  Separation  and  its 
various  subsidiaries,  and  no  records  concerning  it  appear  in 
Somerset  House.  It  is  quite  conceivable  that  one  of  the  pur- 
poses of  the  American  corporation,  Beer,  Sondheimer  &  Co., 
Inc.,  was  to  enable  Minerals  Separation,  Ltd.,  and  its  sub- 
sidiaries in  America  to  give  the  technical  appearance  of  truth 
to  their  statements  that  they  were  in  no  manner  connected 
with  Beer,  Sondheimer  &  Co.,  meaning  the  American  corpora- 
tion instead  of  the  German  co-partnership,  relying  upon  the 
fact  that  connection  with  the  German  concern  was  indirect  and 
by  representation,  rather  than  by  a  direct  connection. 

The  British  black  list,  which  was  published  in  July,  1916, 
included  Beer,  Sondheimer  &  Co.,  and  the  subsequent  declara- 
tions of  British  officials  indicate  the  intention  of  the  British 
Government  to  reach  the  American  end  as  well  as  the  parent 
institution,  but  the  absence  of  any  record  in  England  of  the 
organization  of  Beer,  Sondheimer  &  Co.,  Inc.,  the  American 
corporation,  left  a  loophole  for  continued  technical  denials, 
with  some  semblance  of  truth. 


A  'War"  Contract 

The  agreement  between  Minerals  Separation  American  Syn- 
dicate, 1913,  and  Ballot,  as  purchasing  agent  for  Elkan  and 
Frohnknecht,  already  referred  to,  provided  that  Ballot  should 
cause  a  Delaware  corporation  to  be  organized,  with  shares 
without  par  value,  to  acquire  all  of  the  property  of  Minerals 
Separation  American  Syndicate,  1913,  and  issue  part  of  its  stock 
therefor.  The  agreement  further  provided  that  the  alleged 
agency  agreement  of  January  6,  1915,  should  be  amended  so 
as  to  relieve  Minerals  Separation  American  Syndicate,  1913, 
and  also  the  proposed  Delaware  Company  from  the  payment  of 
commissions,  and  that  in  consideration  thereof  certain  shares 
of  stock  should  be  issued  to  Elkan  and  Frohnknecht  and  ex- 
changed for  voting  certificates  for  a  period  of  five  years.  Of 
course,  this  manifestly  was  intended  to  carry  the  whole  thing 
over  until  after  the  conclusion  of  the  European  War  and  thus 
relieve  many  embarrassing  situations.  As  a  matter  of  fact,  as 
it  later  developed  in  Parliamentary  debates  in  England,  this 
contract  was  subsequently  modified  to  possess  a  duration  co- 
terminous with  the  war. 


426         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  proposed  new  corporation,  which  was  given  the  name 
of  Minerals  Separation  North  American  Corporation,  was 
actually  organized  in  December,  1916,  but  under  the  laws  of 
Maryland,  instead  of  Delaware.  March  16,  1917,  Minerals 
Separation  American  Syndicate,  1913,  was  wound  up  by  appro- 
priate proceedings  in  England,  where  it  was  incorporated. 

Conflicting  Statements 

Of  course,  it  has  been  constantly  asserted  by  Minerals  Sepa- 
ration and  by  the  North  American  Corporation  that  Beer, 
Sondheimer  &  Co.  no  longer,  directly  or  indirectly,  control  or 
act  as  agents  for  Minerals  Separation,  Ltd.,  or  any  of  its  sub- 
sidiaries, but  as  to  the  date  when  such  agency  terminated, 
there  seems  to  be  no  unanimity  among  the  various  statements. 
If  the  recitals  in  the  agreement  of  August  4,  1916,  between 
Minerals  Separation  American  Syndicate,  1913,  and  John  Ballot 
are  to  be  believed,  that  relationship  terminated  in  October, 
1914 ;  yet  according  to  these  same  recitals,  Minerals  Separation 
American  Syndicate  in  January,  1915,  appointed  Elkan  and 
Frohnknecht  its  agents,  and  on  April  5,  1915,  Harry  Falck 
testified  that  Beer,  Sondheimer  &  Co.  were  still  collecting 
royalties  and  presumably  paying  themselves  commissions. 
Another  rather  striking  feature  is  that  as  late  as  January, 
1917,  Minerals  Separation  North  American  Corporation  had  on 
its  letterhead  the  statement  that  Beer,  Sondheimer  &  Co.,  61 
Broadway,  were  its  general  agents. 

Possibly  these  matters  of  history,  thus  briefly  recited,  are 
of  no  particular  concern,  in  view  of  what  we  may  designate  the 
technical  legal  position  at  the  present  time  under  the  patents, 
but  nevertheless  history  is  usually  interesting,  oftentimes 
enlightening  and  frequently  of  benefit  in  the  matter  of  present 
negotiation  and  future  relationship. 

About  Patents 

We  come  now  to  a  consideration  of  the  "Present  Predica- 
ment." The  American  patent  now  known  as  "Fraction  of  1 
per  cent,  oil,"  No.  835120,  was  granted  to  Sulman,  Picard  and 
Ballot  on  November  6,  1906.  Patent  No.  962678  (soluble 
frothing  agents)  was  granted  to  Sulman,  Greenway  and  Hig- 
gins  on  June  26,  1910;  and  a  third,  No.  1099699,  was  granted 


THE  OIL  FLOTATION  SITUATION  427 

June  9,  1914,  to  H.  H.  Greenway  (phenol  or  cresol  cold  with- 
out acid) .  All  now  belong  to  Minerals  Separation  North  Ameri- 
can Corporation,  and  they  are  the  only  patents  out  of  the  53 
different  varieties  claimed  by  them  which  have  been  litigated. 
It  is  now  definitely  settled  by  the  case  of  Minerals  Separa- 
tion, Ltd.,  vs.  Butte  and  Superior  Co.,  250  U.  S.  336,  decided 
by  the  Supreme  Court  of  the  United  States  on  June  2,  1919, 
that  the  use  of  less  than  1  per  cent,  of  oil  on  the  ore  infringes 
patent  No.  835120,  and  that  the  use  of  more  than  1  per  cent, 
of  oil  on  the  ore  does  not  infringe  that  patent. 

A  Remarkable  Document 

The  license  agreement  which  has  been  in  use  for  some  time 
by  Minerals  Separation  North  American  Corporation  is  in 
many  respects  a  most  remarkable  document. 

Paragraph  1  contains  a  blank  for  a  description  of  the  royal- 
ties to  be  paid,  and  according  to  the  best  information  obtain- 
able this  blank  has  been  variously  filled  to  suit  the  situation 
in  respect  to  the  particular  licensee. 

Paragraph  2  requires  the  licensee  to  keep  records  of  all 
concentration  operations,  whether  by  flotation  under  Minerals 
Separation  process  or  by  flotation  under  rival  processes,  or  by 
older  forms  of  concentration,  such  as  hand-sorting  or  gravity 
concentration  by  the  use  of  jigs,  vanners,  tables  and  cyanida- 
tion.  In  many  instances  royalties  are  exacted  from  licensees 
not  only  on  the  concentrates  resulting  from  the  use  of  Minerals 
Separation  processes,  but  also  on  all  concentration  resulting 
from  any  process,  whether  covered  by  Minerals  Separation 
patents  or  not,  presumably  upon  the  theory  that  if  the  Min- 
erals Separation  patent  is  used  at  all  in  the  general  process  of 
concentration,  the  whole  recovery  should  pay  tribute  to  those 
who  control  what  they  are  pleased  to  regard  as  an  essential 
element  of  the  whole  process. 

A  Technical  "Cinch" 

Paragraph  3  requires  that  the  licensee,  during  the  continua- 
tion of  the  license,  shall  "promptly  communicate  and  explain 
to  the  licensors  every  invention  or  discovery  made  or  used  by 
them  which  may  be  an  improvement,  modification  or  addition 
to  any  of  the  inventions  specified  in  the  letters  patent.  It 


428         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

further  provides  that  all  such  inventions  and  discoveries  be- 
come the  property  of  Minerals  Separation,  Ltd.,  leaving  the 
licensee  who  has  invented  the  same  only  shop  rights  for  the 
use  of  his  invention,  and  that  Minerals  Separation,  Ltd.,  there- 
after may  grant  licenses  thereon  and  derive  a  profit  therefrom. 

This  clause,  of  course,  was  intended  to  and  does  give  to 
Minerals  Separation,  Ltd.,  a  complete  control  of  all  future 
development  in  the  art  of  flotation.  Not  only  does  it  include 
every  new  process,  but  it  includes  also  apparatus,  so  that  the 
whole  field  is  brought  within  the  complete  domination  of 
Minerals  Separation.  This  paragraph  also  requires  the  licensee 
to  bind  its  employees  to  assign  and  transfer  to  Minerals 
Separation,  Ltd.,  any  invention  made  by  them  during  their 
employment.  Thus  the  control  of  Minerals  Separation,  Ltd., 
is  extended  over  future  inventions  in  the  art  of  flotation 
beyond  inventions  made  by  the  licensee,  and  includes  all  inven- 
tions made  by  employees. 

The  paragraph  further  provides  that  the  licensee  shall  not, 
without  the  written  consent  of  the  licensor,  during  the  con- 
tinuance of  the  license,  use  or  employ  any  improvement,  modi- 
fication or  addition  to  any  of  the  inventions  specified  in  the 
letters  patent  "within  this  license,"  which  improvement,  modi- 
fication or  addition  is  not  the  property  of  the  licensor. 

Can  Claim  Any  Invention 

When  we  consider  that  Minerals  Separation,  Ltd.,  is  in  a 
position  to  claim  that  any  invention  in  any  branch  of  the  art 
of  flotation  is  in  some  way  an  improvement,  modification  or 
addition  of  its  own  inventions,  it  is  perfectly  obvious  that  the 
purpose  and  result  of  this  clause  is  to  require  the  licensee  to 
obtain  permission  from  Minerals  Separation,  Ltd.,  before  it 
can  use  any  improvement  in  the  art  which  the  future  may 
bring. 

Paragraph  4  provides  that  the  licensor  shall  give  assistance, 
information  and  advice  to  licensee  whenever  required,  upon 
licensee  paying  out  of  pocket  expenses. 

Paragraph  5  provides  that  the  licensee  shall  not,  directly  or 
indirectly,  during  the  license  period  or  thereafter,  dispute  or 
object  to  the  validity  of  the  letters  patent  within  the  license 
or  the  novelty  or  utility  of  the  inventions  specified  therein. 


THE  OIL  FLOTATION  SITUATION  429 

Paragraph  6  clinches  the  contract  by  forbidding  the  licensee 
to  use  any  licensed  inventions  otherwise  than  in  accordance 
with  the  agreement.  It  further  forbids  the  licensee  assisting 
any  hostile  party  in  litigation  against  Minerals  Separation, 
Ltd.,  and  from  appearing  in  court  or  giving  to  the  court  the 
results  of  his  own  observation,  use  or  experience. 

Paragraph  7  forbids  the  licensee  to  sell  or  dispose  of  any 
machinery  or  apparatus,  the  subject  matter  of  any  of  said 
letters  patent,  unless  sold  to  a  responsible  party  who  will,  in 
turn,  agree  to  take  a  license  from  Minerals  Separation,  Ltd. 

Paragraph  8  gives  licensor  the  right  of  inspection  and 
examination. 

Against  Public  Policy 

Paragraph  9  provides  that  the  licensee  shall  not,  without  the 
written  consent  of  licensor,  communicate  any  details  connected 
with  the  working  of  any  of  said  inventions,  modifications, 
additions  or  improvements  to  any  third  party.  This  again 
emphasizes  the  restraint  imposed  by  Minerals  Separation, 
Ltd.,  upon  any  dissemination  of  information  except  under  its 
direction  or  control.  This  restraint  upon  the  spread  of  knowl- 
edge is  not  only  adverse  to  the  public  interests,  but  is  certainly 
against  public  policy. 

Paragraph  10  of  the  license  agreement  provides  that  the 
licensor,  when  required  by  the  licensee,  "shall  prepare  and 
supply,  as  soon  as  may  be  possible,  plans  and  specifications  of 
the  plant  for  the  working  of  said  invention."  Of  course,  this 
paragraph  must  be  read  in  connection  with  the  previous  para- 
graph, which,  in  effect,  forbids  the  licensee  to  use  any  apparatus 
except  that  specified  by  the  licensor,  and  read  in  this  connec- 
tion, it  simply  makes  more  definite  and  positive  the  restraint 
imposed  by  the  previous  paragraph. 

Question  of  Royalties 

When  we  come  to  the  question  of  royalties,  we  reach  a  most 
interesting  field.  Mr.  T.  J.  Hoover,  one  time  manager  of 
Minerals  Separation,  Ltd.,  who  resigned  his  position  in  1910, 
published  a  book  in  1912,  entitled  "Concentration  of  Ore  by 
Flotation."  In  this  book,  on  page  163,  he  says : 


430         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  average  royalty  charged  by  the  process  owners  for  the 
use  of  these  flotation  processes  (referring  to  Minerals  Separa- 
tion, Ltd.)  is  one  shilling  (25  cents)  per  ton  of  ore  treated.  This 
is  a  very  high  royalty  as  measured  by  others  with  which  miners 
and  metallurgists  are  familiar.  It  is  conceded  that  the  inventor 
deserves  compensation  for  his  ingenuity,  but  one  shilling  per 
ton  is  about  four  times  as  large  a  royalty  as  the  mine  manager 
would  expect. 

In  this  connection,  it  perhaps  is  well  to  note  that  when  the 
plan  of  Minerals  Separation,  Ltd.,  to  charge  royalties  upon  all 
values  recovered  by  concentration,  when  flotation  was  used 
as  any  part  of  the  process,  was  vigorously  combated  and  con- 
tended against  by  applicants  for  licenses  as  unreasonable,  un- 
fair and  unjust,  and  when  absolutely  driven  from  its  position 
by  the  logical  force  of  the  arguments  against  such  an  arrange- 
ment, Minerals  Separation,  Ltd.,  very  gallantly  came  to  the 
front  and  announced  that  it  was  going  to  change  its  policy  in 
respect  to  royalties  and  was  going  to  offer  to  applicants  for  a 
license  an  opportunity  to  make  a  selection  and  to  determine 
for  themselves  whether  they  would  pay  a  license  charge  upon 
the  whole  recovery  or  a  license  charge  upon  that  portion 
recovered  by  the  flotation  process  alone.  This  offer  seemed  to 
afford  some  means  of  at  least  partial  relief,  until  a  careful 
analysis  was  made  of  the  different  bases  for  royalty  computa- 
tion in  the  suggested  new  contract.  This  computation  quickly 
demonstrated  that  whichever  plan  the  licensee  chose,  the 
charge  was  practically  the  same — in  other  words,  Minerals 
Separation,  Ltd.,  caught  them  going  and  caught  them  coming. 

To  make  a  concrete  illustration,  let  us  suppose  that  in  the 
whole  concentration  process  of  a  particular  licensee  four  tons 
of  ore  are  treated,  from  which  ore  old-fashioned  and  well- 
known  processes  extract  four-fifths  of  the  recoverable  value 
and  oil  flotation  one-fifth.  Under  the  original  plan  of  royalty 
payment  the  licensee  would  be  paying  25  cents  per  ton  of  ore 
treated,  or  $1.00.  Under  the  new  plan  the  licensee  would  be 
paying  only  upon  the  amount  of  metallic  value  recovered  by 
oil  flotation,  but  instead  of  paying  one-fifth  of  the  original 
charge,  he  would  be  paying  five  times  as  much  and  Minerals 
Separation,  Ltd.,  would  get  its  dollar  just  the  same. 


THE  OIL  FLOTATION  SITUATION  431 

Three  Noted  Cases 

It  is  perhaps  purposeless  at  this  time  to  go  into  detail  con- 
cerning the  different  decisions  in  the  now  famous  cases  of 
Minerals  Separation  vs.  Hyde,  Minerals  Separation  vs.  Miami 
Company,  and  Minerals  Separation  vs.  Butte  and  Superior 
Company.  All  three  cases  were  fought  through  the  several 
courts,  and  two  of  them,  at  least,  reached  the  Supreme  Court 
of  the  United  States.  As  already  pointed  out,  the  most  recent 
decision  of  that  court  fixes  the  status  of  the  fundamental 
patent,  viz:  835120,  fraction  of  1  per  cent,  oil,  and  makes 
perfectly  plain  the  effect  of  its  original  decision  in  the  Hyde 
case.  Minerals  Separation,  Ltd.,  is  at  last  confined  definitely 
to  a  royalty  upon  the  use  of  the  oil  froth,  where  less  than  1 
per  cent,  of  oil  on  the  ore  is  used. 

In  order  to  recover  in  the  Hyde  case,  Minerals  Separation, 
Ltd.,  had  to  take  a  fixed  and  definite  stand  to  the  effect  that 
its  patent  made  an  entirely  new  discovery,  one  wholly  unknown 
to  the  previous  art,  viz:  that  with  a  percentage  of  oil  far 
below  any  previously  used,  coupled  with  violent  agitation,  a 
new  phenomenon  appeared  in  the  peculiarly  coherent  and  per- 
sistent froth  which  was  produced  and  which  carried  the  metal- 
lic particles  to  the  surface,  where  they  were  easily  skimmed 
and  recovered. 

Their  counsel,  before  the  Supreme  Court  of  the  United 
States,  in  answer  to  direct  questions  from  the  bench,  announced 
that  when  the  inventors  began  to  cut  down  the  quantity  of  oil 
below  one-half  of  1  per  cent.,  then  first  the  invention  began  to 
appear,  and  it  was  upon  their  insistence  that  their  invention  lay 
in  the  very  low  percentage  of  oil  used,  thereby  drawing  a  well- 
defined  line  between  the  claimed  invention  and  the  previous 
art,  that  they  were  enabled  to  maintain  their  process  patent. 

In  that  same  litigation  they  contended  that  their  invention 
could  not  be  practiced  with  more  than  1  per  cent,  of  oil  on  the 
ore,  but  when  it  came  to  the  Butte  and  Superior  case,  Minerals 
Separation  very  artfully  took  the  position  that  no  matter  how 
much  oil  was  used,  and  notwithstanding  the  fact  that  the 
quantity  might  be  in  excess  of  1  per  cent,  in  actual  practice, 
nevertheless  the  efficient  oil  and  consequently  the  oil  of  the 
process  was  less  than  1  per  cent.,  that  anything  above  the 
"critical  proportions"  referred  to  in  their  patent  was  sur- 


432         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

plusage  and  wholly  ineffective,  if  not  detrimental  to  the 
process,  and  that  consequently  any  use  of  oil  in  flotation  was 
an  infringement  upon  their  process. 

One  Claim  Exploded 

Of  course,  this  contention  may  have  been  quite  natural,  but 
if  successful  it  would  have  meant  that,  notwithstanding  the 
fact  that  their  patent  confines  itself  to  a  fraction  of  1  per  cent., 
it  would,  in  effect,  have  been  a  patent  upon  any  use  of  oil  in 
the  flotation  and  recovery  of  the  metallic  values  in  ores.  This 
contention  was  very  properly  exploded  by  the  Supreme  Court 
of  the  United  States  in  the  Butte  and  Superior  case.  It  was 
there  said: 

From  this  consideration  of  the  terms  of  the  patent  as  written, 
it  is  apparent  that  it  makes  no  differentiation  whatever  either 
in  the  claims  or  in  the  specification  among  the  oils  having  a 
preferential  affinity  for  metalliferous  matter,  and  that  its  dis- 
closure, to  which  the  petitioner  must  be  limited,  is  that  when  a 
fraction  of  1  per  cent,  on  the  ore  of  any  such  oil  is  used  in  the 
manner  prescribed,  there  will  be  produced  a  metal-bearing  froth, 
the  result  of  the  process.  No  notice  is  given  to  the  public,  and 
it  is  nowhere  "particularly  pointed  out"  in  the  claims  that  some 
oils,  or  combinations  of  oils,  having  a  preferential  affinity  for 
metalliferous  matter,  are  more  useful  than  others  in  the  process, 
or  that  some  may  be  used  successfully  and  some  not,  or  that 
some  are  "frothing  oils,"  a  designation  not  appearing  in  the 
patent,  and  that  some  are  not.  The  patentees  discovered  the 
described  process  for  producing  the  result  or  effect,  the  metal- 
bearing  froth,  but  they  did  not  invent  that  result  or  froth — 
their  patent  is  on  the  process.  It  is  not  and  can  not  be  on  the 
result — and  the  scope  of  their  right  is  limited  to  the  means  they 
have  devised  and  described  as  constituting  the  process. 

This  decision  of  the  Supreme  Court  of  the  United  States 
undoubtedly  ends  the  determined  effort  of  Minerals  Separation, 
Ltd.,  to  acquire  a  complete  and  absolute  monopoly  of  all  oil 
flotation,  but  unfortunately  it  does  not  end  the  grip  of  the 
monopoly  on  an  essential  and  very  practical  part  of  the  metal- 
producing  industry. 

Future  Outlook 

In  the  fall  of  1918  complaint  was  made  to  the  Federal  Trade 
Commission  that  Minerals  Separation,  Ltd.,  was  violating  the 


THE  OIL  FLOTATION  SITUATION  433 

provision  of  the  act  creating  the  Federal  Trade  Commission 
and  also  the  provisions  of  the  Claytoji  act.  After  an  inves- 
tigation, a  complaint  was  lodged  by  the  Federal  Trade  Com- 
mission, and  Minerals  Separation,  Ltd.,  and  all  its  subsidiaries 
and  agents  were  made  parties  defendant  in  the  proceeding. 
In  due  course  pleadings  were  filed  on  behalf  of  all  of  the 
defendants.  At  this  stage  of  the  matter  your  American  Min- 
ing Congress  took  a  hand  on  behalf  of  the  mining  industry  of 
the  United  States. 

Right  here  I  want  to  pause  long  enough  to  say  that  this  is 
but  another  example  of  the  fact  that  The  American  Mining 
Congress  is  everybody's  congress,  but  it  is  nobody's  congress. 
By  this  I  mean  that  it  represents  the  industry  generally,  but 
no  particular  individual,  company  or  interest  specifically.  If 
its  attitude  at  any  time  runs  counter  to  the  interests  of  any 
particular  individual  or  company,  it  will  always  be  found  that 
those  interests  are  not  the  interests  of  the  industry  generally ; 
in  other  words,  the  Congress  represents  the  whole  industry, 
not  any  particular  part  of  it. 

American  Mining  Congress  Intervenes 

The  American  Mining  Congress,  after  a  careful  consideration 
of  the  situation,  concluded  that  the  proceeding  before  the 
Federal  Trade  Commission  must  be  carried  on,  and  that  a 
complete  determination  of  all  questions  involved  in  the  com- 
plaint against  Minerals  Separation,  Ltd.,  must,  if  possible,  be 
thrashed  out  in  the  interests  of  all  who  were  using  or  who 
might  use  the  oil  flotation  process,  and  undertook  to  answer 
the  following  questions  from  the  authorities: 

(1)  Are  Minerals  Separation  North  American  Corporation 
and  other  respondents  engaged  in  interstate  commerce,  and  are 
the  transactions  complained  of  methods  in  interstate  com- 
merce ? 

(2)  Are  the  acts  complained  of  methods  of  competition? 

(3)  Are  the  practices  of  respondents  in  insisting  upon  terms 
in  their  license  agreements  which  give  them  unified  control 
over  patents  which,  under  separate  control,  might  be  used  in 
competition  with  each  other,  and  their  control  over  inventions 
discovered  by  their  licensees  and  their  employees,  unlawful 
practices,  in  violation  of  law  and  public  policy? 


434         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

(4)  Has  the  Federal  Trade  Commission,  in  any  event,  juris- 
diction in  respect  to  the  alleged  exorbitant  and  discriminatory 
royalties  ? 


General  Principles 

I  shall  not  undertake  to  discuss  all  of  the  authorities  bearing 
on  these  several  questions  of  law,  but  content  myself  with  ref- 
erence to  a  few  of  the  general  principles  enunciatd  by  the 
Supreme  Court  of  the  United  States  in  decisions  which  con- 
clusively show  that  the  answer  is  "yes"  to  all  four  of  the 
questions. 

In  the  very  famous  case  of  Gibbons  vs.  Ogden,  9  Wheaton  1, 
Mr.  Chief  Justice  Marshall  said : 

Commerce  undoubtedly  is  traffic,  but  it  is  something  more. 
It  is  intercourse. 

In  Pensacola  Co.  vs.  Western  Union  Co.,  96  U.  S.  1,  it  was 
said: 

It  is  not  only  the  right  but  the  duty  of  Congress  to  see  to  it 
that  intercourse  among  the  states  and  the  transmission  of  intelli- 
gence are  not  obstructed  or  in  any  way  encumbered  by  state 
legislation. 

In  International  Textbook  Co.  vs.  Pigg,  217  U.  S.  91,  it  was 
held  that  intercourse  by  means  of  correspondence  through  the 
mails,  with  agents  and  scholars,  was  interstate  commerce. 

In  U.  S.  vs.  United  Shoe  Machinery  Co.,  234  Fed.  127,  145, 
it  was  said : 

It  is  sufficient  to  say  that  as  new  methods  of  transacting 
business  are  devised,  if  they  are  found  to  be  in  effect  methods 
of  carrying  on  commerce  in  any  business,  and  the  means  for 
commercial  transactions  between  the  owner  of  the  article  on  the 
one  hand  and  the  person  who  wants  to  deal  in  it  or  use  it  in 
carrying  on  his  business  on  the  other  hand,  whether  it  be  manu- 
facturing, selling,  trading,  leasing,  transportation,  communica- 
tion, or  information,  and  it  is  sent  or  transported  from  one  state 
to  another,  it  is  interstate  commerce,  and,  therefore,  subject  to 
be  regulated  by  Congress  under  the  commerce  clause  of  the 
Constitution. 


THE  OIL  FLOTATION  SITUATION  435 

In  Marienelli  vs.  United  Booking  Offices,  227  Fed.  165,  it  was 
held  that  booking  performers  for  a  theatrical  circuit,  which 
requires  them  to  pass  from  state  to  state,  taking  with  them 
paraphernalia  and  stage  properties,  constitutes  interstate  com- 
merce. 

In  the  light  of  these  authorities,  when  we  take  into  con- 
sideration the  fact  that  every  license  agreement  put  out  by 
Minerals  Separation,  Ltd.,  requires  the  constant  transmission 
from  the  point  where  the  mining  books  of  account  are  kept 
to  the  head  office  of  the  company  in  New  York  of  all  informa- 
tion in  respect  to  concentrates  produced,  methods  employed  in 
operation,  information  as  to  assays,  recoveries,  discoveries  and 
the  like,  that  it  is  sending  its  agents,  engineers,  auditors  and 
other  representatives  throughout  the  various  states  of  the 
Union,  there  can  be  no  question  whatever  but  that  it  is  engaged 
in  interstate  commerce. 

Stifling  Competition 

I  have  already  pointed  out  the  several  provisions  of  the 
licenses  granted  by  Minerals  Separation,  Ltd.,  which  require 
all  further  discoveries  and  inventions  by  licensees  or  their 
employees  be  made  over  to  it  for  its  exclusive  operation,  use 
and  benefit.  There  can  be  no  question  but  that  Minerals 
Separation,  Ltd.,  is  engaged  in  methods  of  competition  with 
respect  to  all  inventors,  manufacturers,  vendors  and  users  of 
processes  or  apparatus  which  in  no  manner  infringe  upon  or 
conflict  with  the  processes  practiced  and  the  apparatus  used 
by  Minerals  Separation,  Ltd. ;  but  if  it  be  answered  that  there 
are  none  such,  that  Minerals  Separation,  Ltd.,  is  in  the  field 
alone,  that  it  possesses,  by  virtue  of  the  patent  laws,  a  legal 
monopoly,  the  answer  is  that  by  its  methods  of  licensing,  by 
which  it  seeks  to  and  does  obtain  an  absolute  and  complete 
control  over  every  discovery  and  invention  of  each  and  every 
licensee  and  all  employees  of  its  licensees,  it  is  engaged  in 
competition  within  the  meaning  of  Section  5  of  the  Federal 
Trade  Commission  Act,  for  if  its  acts  are  designed  to  and  do 
prevent  competition  against  it  on  the  part  of  other  individuals 
or  concerns  which  might  be  competitors,  and  such  acts  are 
done  for  the  purpose  of  stifling  and  suppressing  competition, 
they  must  be  regarded  as  acts  actually  directed  against  com- 


436         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

petitors,  actual  or  potential,  and  in  violation  of  Section  5  of 
the  Federal  Trade  Commission  Act.  It  surely  does  not  need 
any  argument  to  demonstrate  that  the  most  effective  means  of 
competition  known  to  modern  business  is  to  stifle  all  such  com- 
petition. This  has  been  characterized  over  and  over  again  as 
competition,  and  decisions  of  the  Federal  Trade  Commission 
in  the  case  against  the  Cudahy  Packing  Company  and  numer- 
ous other  cases  recognize  and  affirm  the  doctrine. 

When  we  come  to  consider  the  question  of  public  policy  in 
respect  to  the  methods  employed  by  Minerals  Separation,  Ltd., 
we  should  first  consider  again  the  fact  that  Article  3  of  the 
license  requires  the  licensees  to  communicate  and  turn  over  to 
Minerals  Separation,  Ltd.,  every  invention  or  discovery  made 
by  them  or  their  employees  during  the  continuance  of  the 
license  agreement,  and  that  elsewhere  in  the  agreement  the 
duration  of  the  contract  is  the  term  of  the  patents  within  the 
license,  or  any  additional  patents  that  may  be  added  thereto 
by  the  licensors,  and  we  then  discover  that  the  practical  effect 
of  the  contract  is  to  make  its  terms  perpetual. 

It  may  be  seriously  doubted  whether,  if  this  practice  is 
permitted  and  the  license  is  enforced  in  accordance  with  its 
strict  terms,  the  licensees  do  not  contract  in  such  a  way  that, 
notwithstanding  the  expiration  of  the  fundamental  patents  by 
lapse  of  time,  the  contract  will  continue  in  force  so  long  as 
Minerals  Separation,  Ltd.,  has  any  live  patent  on  process  or 
apparatus,  and  the  licensees  be  required  to  pay  tribute  to  the 
licensor  for  a  period  far  beyond  the  time  intended  by  the  act 
of  Congress  in  creating  a  patent  monopoly. 

Right  here  it  is  well  to  call  attention  to  the  fact  that  in 
Pennock  vs.  Dialogue,  2  Peters  1,  decided  in  1829,  Mr.  Justice 
Story  said: 

Object  of  Patent  Laws 

While  one  great  object  (of  our  patent  laws)  was  by  holding 
out  a  reasonable  reward  to  inventors  and  giving  them  an  exclu- 
sive right  to  their  inventions  for  a  limited  period  to  stimulate 
the  efforts  of  genius,  the  main  object  was  to  promote  the  prog- 
ress of  science  and  the  useful  arts. 

Again,  in  Kendall  vs.  Windsor,  21  How.  322,  it  was  said : 


THE  OIL  FLOTATION  SITUATION  437 

It  is  undeniably  true  that  the  limited  and  temporary  monopoly 
granted  to  inventors  was  never  designed  for  their  exclusive  profit 
or  advances;  the  benefit  to  the  public  or  community  at  large  was 
another  and  doubtless  the  primary  object  in  granting  and  secur- 
ing the  monopoly. 

Referring  to  these  cases  and  quoting  from  them  with 
approval,  the  Supreme  Court  of  the  United  States,  in  Motion 
Picture  Patents  Co.  vs.  Universal  Film  Co.,  243  U.  S.  502,  said: 

The  primary  purpose  of  our  patent  laws  is  not  the  creation  of 
private  fortunes  for  the  owners  of  patents,  but  is  to  promote 
the  progress  of  science  and  the  useful  arts. 

In  Straus  vs.  American  Publishers'  Assn.,  231  U.  S.  222,  con- 
tracts otherwise  clearly  within  the  terms  of  the  Sherman  Act 
were  claimed  to  be  justified  because  of  rights  secured  under 
the  copyright  laws  of  the  United  States,  but  it  was  said  by 
the  court: 

It  cannot  be  successfully  contended  that  the  monopoly  of  a 
copyright  is  in  this  respect  any  more  extensive  than  that  se- 
cured under  the  patent  law.  No  more  than  the  patent  statute 
was  the  copyright  act  intended  to  authorize  agreements  in  un- 
lawful restraint  of  trade  and  tending  to  monopoly,  in  violation 
of  the  specific  terms  of  the  Sherman  law,  which  is  broadly  de- 
signed to  reach  all  combinations  in  unlawful  restraint  of  trade, 
and  tending,  because  of  the  agreements  or  combinations  entered 
into,  to  build  up  and  perpetuate  monopolies.  *  *  *  The  patent 
statute  and  the  Sherman  Act  are  each  valid  laws  of  the  United 
States.  While  a  patentee  should  be  protected  in  the  exercise 
of  rights  secured  to  the  inventor  under  the  .patent  system  enacted 
into  the  laws  of  the  United  States,  there  is  nothing  in  the  act 
which  gives  the  patentee  a  license  to  violate  other  statutes  of 
the  United  States,  and  certainly  not  the  one  now  under  con- 
sideration. 

From  these  references  to  and  quotations  from  a  few  only 
of  the  many  decisions  to  the  same  effect,  it  is  seen  that  it  is 
clearly  against  public  policy  to  permit  the  owners  of  a  patent 
monopoly  to  broaden  and  extend  that  monopoly  beyond  the 
strict  limitations  which  the  law  gives  as  a  stimulus  to  the 
inventive  genius. 


438         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Federal  Trade  Commission 

When  we  come  to  a  consideration  of  the  question  as  to  the 
jurisdiction  of  the  Federal  Trade  Commission  in  respect  to  the 
acts  of  Minerals  Separation,  Ltd.,  and  the  exorbitant  and  dis- 
criminatory royalties  demanded  by  it,  we  find  equally  emphatic 
approval  in  the  decision  of  the  Supreme  Court  of  the  United 
States  under  the  Sherman  Act.  That  act  has  been  interpreted 
by  the  Supreme  Court  of  the  United  States  to  authorize  de- 
crees not  only  enjoining  proven  violations  of  it,  but  also 
decrees  "recreating  out  of  the  elements  now  composing  it  a 
new  condition  which  shall  be  honestly  in  harmony  with  and 
not  repugnant  to  the  law."  (U.  S.  vs.  American  Tobacco  Co., 
221  U.  S.  106.) 

The  decree,  as  finally  entered,  under  the  authority  of  the 
decision  just  mentioned,  fixed  the  price  at  which  the  American 
Cigar  Company  should  sell  its  holdings  in  Federal  Cigar  Com- 
pany, the  price  at  which  P.  Lorillard  Company  should  sell  its 
share  in  American  Snuff  Company,  the  price  which  American 
Tobacco  Company  should  charge  Liggett  &  Meyers  Company 
and  P.  Lorillard  for  specified  assets,  brands  and  good-will,  and 
throughout  the  entire  decree  other  directions  of  similar  char- 
acter in  most  minute  detail  were  made  in  respect  to  many  of 
the  defendants  and  many  of  their  contracts  and  property 
rights. 

In  U.  S.  vs.  Du  Pont,  188  Fed.  127,  defendant  was  directed 
to  organize  additional  corporations,  furnish  them  with  cash 
working  capital  and  facilities,  transfer  properties,  facilities, 
information,  etc. 

In  U.  S.  vs.  U.  P.  Railroad,  the  decree  went  into  detail  con- 
cerning shares  of  other  corporations  owned  by  it,  the  parties 
to  whom  they  should  be  sold,  the  price  to  be  paid,  etc. 

In  many  other  cases,  the  decree  finally  entered  upon  decisions 
of  the  Supreme  Court  of  the  United  States  goes  into  most 
elaborate  details  of  comment  and  direction. 

It  is  thus  seen  that  not  only  do  the  courts  take  cognizance 
of  violation  of  specific  statutes,  but  when  they  find  that  such 
violations  have  seriously  affected  the  public  interests,  they 
go  into  detail  in  directing  how  these  violations  shall  be  cor- 
rected, the  public  interests  subserved  and  the  people  permitted 
to  come  into  their  own.  These  decisions  have  been  followed 


THE  OIL  FLOTATION  SITUATION  439 

repeatedly  by  the  Federal  Trade  Commission  in  numerous 
determinations,  and  there  can  be  no  question  but  that  that 
Commission  has  jurisdiction  to  correct  the  abuses  practiced  and 
attempted  to  be  practiced  by  this  most  offensive  monopoly. 

Minerals  Separation,  Ltd.,  originally  incorporated  with  a 
capital  of  fifteen  thousand  pounds,  had  its  capital  increased  on 
at  least  two  different  occasions,  until  at  last  accounts  it  had  a 
total  capital  of  fifty  thousand  pounds.  Minerals  Separation 
American  Syndicate  had  a  capital  of  fifty-two  thousand  five 
hundred  pounds,  and  Minerals  Separation  American  Syndicate 
(1913),  Ltd.,  had  a  capital  of  two  hundred  and  fifty  thousand 
pounds.  Minerals  Separation  North  American  Corporation 
was  incorporated  under  the  laws  of  Delaware,  having  a  capital 
stock  without  par  value,  but  inasmuch  as  it  was  organized 
practically  for  the  purpose  of  taking  over  Minerals  Separation 
American  Syndicate  (1913),  Ltd.,  it  very  probably  did  not 
have  a  capital  much  larger  than  the  concern  which  it  absorbed. 
At  all  events,  the  total  capitalization  of  the  companies  inter- 
ested in  the  process  patents  probably  does  not  exceed  five 
hundred  thousand  pounds ;  but  in  order  to  be  on  the  safe  side, 
let  us  concede  that  these  interests  have  a  total  capitalization 
of  one  million  pounds,  or  five  million  dollars.  It  certainly  is 
fair  to  assume  that  a  considerable  portion  of  this  capital  repre- 
sents an  estimated  value  of  patent  rights,  as  distinguished 
from  actual  money  invested. 

Annual  Income  $7,000,000 

In  the  answer  filed  by  Minerals  Separation  North  American 
Corporation  in  the  proceedings  before  the  Federal  Trade  Com- 
mission, it  is  affirmatively  alleged: 

That  it  (Minerals  Separation  North  American  Corporation) 
and  its  predecessors  in  title  have  granted  upward  of  one  hundred 
licenses  in  the  United  States  that  are  now  in  full  force  and 
effect,  and  that  the  aggregate  tonnage  of  ore  milled  and  in  part 
treated  under  said  licenses  is  in  excess  of  twenty-eight  million 
tons  per  year. 

Applying  to  this  twenty-eight  million  tons  the  estimate  made 
by  Mr.  Hoover  that  the  average  royalty  is  25  cents  per  ton, 
we  have  an  annual  income  of  $7,000,000  on  a  total  capitaliza- 
tion which  cannot  exceed  five  million.  This  would  seem  to  be 


440         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

a  wholly  unwarranted  profit  taken  by  the  owners  of  the  process 
patents  from  the  mining  industry. 

It  is  hoped  that  the  Federal  Trade  Commission  will  conclude 
to  inquire  into  the  amount  of  capital  actually  invested,  the 
life  of  the  original  patents,  and  the  probable  tonnage  to  pay 
royalties,  and  then  fix  for  Minerals  Separation,  Ltd.,  and  its 
subsidiaries  a  rate  of  license  charge  which  will  permit  a  fair 
return  and  no  more  upon  such  capital  invested.  Of  course,  in 
this  connection  the  duration  of  the  patent  monopoly  under  the 
law  is  an  important  item  and  an  element  which  must  have  a 
controlling  influence.  At  the  same  time,  the  efforts  which 
have  been  and  are  being  made  to  establish  a  monopoly  which 
shall  have  a  duration  beyond  the  statutory  limit  of  patent 
right  should  be  checked,  and  the  scheme  for  laying  a  perpetual 
tribute  on  the  mining  industry  should  be  frustrated. 


FEDERAL  REGULATION  OF  EXPLOSIVES  441 


FEDERAL  REGULATION  OF  EXPLOSIVES 

Address  by  CLARENCE  HALL,  Explosives  Engineer,  U.  S.  Bureau  of 

Mines 

After  the  United  States  entered  the  World  War  the  Federal 
Explosives  Regulation  Law  was  enacted  and  Dr.  Van  H.  Man- 
ning, Director  of  the  Bureau  of  Mines,  was  authorized  to  en- 
force the  provisions  of  this  act.  The  purpose  of  the  law  was 
to  prevent  disloyal  persons  from  procuring  explosives  or  their 
ingredients  and  to  keep  such  articles  out  of  the  hands  of  per- 
sons who  would  not  protect  them  carefully  enough  to  prevent 
them  from  being  stolen  or  used  for  unlawful  purposes. 

The  Director  of  the  Bureau  of  Mines  under  the  law  was 
authorized  to  make  rules  and  regulations  for  carrying  into 
effect  this  act,  subject  to  the  approval  of  the  Secretary  of  the 
Interior.  After  a  careful  investigation  of  this  subject  by  con- 
sulting leading  authorities  on  explosives  and  representatives  of 
powder  companies,  rules  and  regulations  were  adopted.  Imme- 
diately licenses  were  issued  to  all  persons  known  to  be  loyal 
who  had  occasion  to  use  explosives  or  their  ingredients.  It  will 
be  readily  seen  that  the  handling  of  such  a  proposition  through- 
out the  United  States,  Alaska  and  dependencies  involved  a 
thorough  organization,  inasmuch  as  under  the  law  not  only 
were  all  common  explosives  included,  but  also  a  number  of 
ingredients  which  are  of  every-day  necessity  for  household  use 
and  which  involved  the  issuing  after  investigation  of  approxi- 
mately 1,500,000  licenses. 

The  headquarters  of  the  organization  was  in  Washington, 
D.  C.  This  office  was  sub-divided  into  the  various  branches 
required  for  the  enforcement  of  the  law  and  the  administration 
of  the  large  field  force.  The  chief  branches  of  this  office  con- 
sisted of:  the  Central  Committee,  which  rendered  opinions  of 
administrative  nature  and  on  questions  of  policy;  the  branch 
which  handled  the  investigation  of  applications  and  the  issuing 
of  Manufacturers',  Exporters'  and  Importers'  licenses,  the  in- 
vestigations and  subsequent  appointment  of  those  persons  who 
were  to  act  on  the  field  force,  and  finally  the  enforcement  of  the 
law  itself  which  consisted  in  the  investigation  of  all  violations 


442         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  the  law,  the  supervision  of  prosecutions  and  the  recommen- 
dations relative  to  proper  storage  of  explosives  or  ingredients 
in  the  individual  cases. 

Field  Operation 

In  the  field  acting  under  the  supervision  of  the  Washington 
office  a  United  States  Explosives  Inspector  took  charge  in  each 
State  and  in  the*  Territory  of  Alaska.  These  inspectors  were 
appointed  by  the  President  by  and  with  the  approval  and  con- 
sent of  the  Senate. 

Under  each  United  States  Explosives  Inspector  there  oper- 
ated an  Advisory  Committee,  which  was  made  up,  when  prac- 
ticable, of  a  representative  of  those  industries  or  interests 
which  would  be  the  most  affected  by  the  Explosives  Law,  such 
as :  The  Council  of  National  Defense,  the  Department  of  Jus- 
tice, Department  of  Agriculture,  a  fire  insurance  company,  a 
casualty  company,  a  dealer  in  and  user  of  explosives,  a  manu- 
facturer of  explosives,  etc.  These  members  of  the  Advisory 
Committee  were  designated  as  Assistant  Inspectors,  and  their 
business  associations  in  their  State  were  expected  to  obtain  and 
render  the  United  States  Explosives  Inspector  such  assistance 
as  lay  within  their  power.  The  appointment  of  these  Assistant 
Inspectors  was  made  by  the  Director  of  the  Bureau  of  Mines 
with  the  approval  of  the  Secretary  of  the  Interior. 

The  Bureau  of  Explosives  of  the  American  Railway  Associa- 
tion, New  York  City,  acted  in  close  co-operation  with  the  Ex- 
plosives Division  of  the  Bureau  of  Mines  in  that  it  handled  all 
cases  of  explosives  or  ingredients  while  in  transit  in  public 
carriers,  and  its  inspectors  throughout  the  country  assisted  at 
every  opportunity  the  United  States  Explosives  Inspectors 
when  occasion  arose. 

For  the  licensing  of  users  of  explosives  and  ingredients  it 
became  necessary  to  have  a  field  force  of  over  15,000  men,  who 
were  chosen  and  appointed  by  the  Director  of  the  Bureau  of 
Mines  after  investigation  as  to  loyalty,  and  as  to  their  having 
unlimited  power  to  administer  oath  and  not  being  connected  or 
interested  in  any  way  with  the  manufacture  or  sale  of  explo- 
sives or  ingredients. 

In  the  enforcement  of  the  act  a  deplorable  state  of  affairs 
was  found  to  exist  in  many  States  in  the  mining  district,  where 


FEDERAL  REGULATION  OF  EXPLOSIVES  443 

miners  not  only  had  free  access  to  explosives,  but  made  a  com- 
mon practice  of  carrying  them  to  their  homes  in  thickly  popu- 
lated mining  towns.  It  was  not  an  uncommon  occurrence  to 
find  a  hundred  pounds  of  explosives  in  a  single  miner's  lodging 
house,  and  statistics  show  frequent  accidents  which  occurred 
from  miners  filling  their  paper  tubes  by  the  light  of  ordinary 
oil  lamps.  In  the  States  of  Kansas  and  Alabama  about  80  per 
cent,  of  this  practice  was  done  away  with  through  the  co- 
operation of  the  coal  operators  in  issuing  or  selling  explosives 
to  the  men  at  the  mine,  thereby  reducing  the  necessity  of  carry- 
ing these  to  their  lodging  houses. 

In  studying  the  magazine  problem  it  was  found  in  thousands 
of  instances  that  explosives  were  stored  not  only  in  such  care- 
less manner  that  they  could  have  easily  been  stolen,  but 
also  that  they  were  located  in  such  proximity  to  inhabited 
dwellings,  buildings,  public  highways  and  railroads  that  their 
presence  was  a  constant  menace.  Quantities  up  to  10,000 
pounds  in  a  single  magazine  have  been  found  in  the  heart  of  a 
town,  which  condition,  had  an  explosion  occurred,  would  have 
resulted  in  loss  of  life  and  property. 

Not  only  have  several  attempts  been  made  to  dynamite  rail- 
road bridges  and  other  structures  with  the  object  of  hampering 
the  transportation  or  equipment  of  troops,  but  on  several  occa- 
sions the  War  Department  has  appealed  to  the  Bureau  of  Mines 
to  remove  the  menace  due  to  the  proximity  of  improperly  con- 
structed unguarded  magazines  which  were  located  at  or  near 
mobilization  camps. 

Thousands  of  Investigations 

Acting  under  instructions,  special  investigations  were  made 
in  the  field  by  inspectors  or  their  assistants  in  the  cases  of 
refusals  or  revocations  of  licenses,  improper  storage  facilities, 
violations  of  the  law  and  outrages  against  life  and  property  by 
the  use  of  bombs  and  other  explosives.  There  have  been  more 
than  4,500  special  investigations  made  and  more  than  125 
convictions  of  violation  of  the  act.  The  number  of  magazines 
listed  surpasses  8,000,  additional  ones  being  received  at  the 
rate  of  100  daily  in  the  form  of  owner's  reports,  showing  de- 
tailed construction,  location  and  contents  at  the  time  the  work 
was  discontinued. 


444         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

State  Control  Advocated 

The  Bureau  of  Mines  recommended  that  the  work  be  con- 
tinued, especially  now,  as  the  country  is  confronted  with  the 
problem  of  reconstruction  and  industrial  unrest.  However, 
Congress  failed  to  make  any  appropriation  to  carry  on  this 
work.  The  reasons  which  prompted  the  enactment  of  adequate 
legislation  to  control  the  use,  storage  and  handling  of  explo- 
sives during  wartime  are  equally  present  now.  In  view  of  the 
fact  that  Congress  is  not  disposed  to  enact  any  act  for  the 
Federal  control  of  explosives,  it  is  important  that  the  various 
States  should  exercise  control.  The  Federal  Act  brought  about 
a  notable  reform  and  much  of  this  work  will  be  lost  if  the  States 
do  not  exercise  some  control.  Today  many  States  have  no  laws, 
many  have  laws  that  are  inadequate  to  cope  with  the  situation, 
and  some  States  that  have  laws  do  not  properly  enforce  them. 
The  Bureau  of  Mines  is  in  a  position  to  furnish  to  State  legis- 
lative bodies  information  which  will  be  of  value  in  the  formu- 
lation of  laws  relating  to  explosives  which  will  safeguard  life 
and  property. 

It  is  questionable  if  a  uniform  State  law  can  be  formulated. 
However,  many  features  could  be  adopted  by  all  States,  such 
as  construction  of  magazines  and  their  location  in  respect  to 
other  buildings,  railroads  and  highways.  The  Bureau  has  col- 
lected the  varous  laws  of  the  States  relative  to  explosives,  and 
these  are  given  in  the  following  appendix.  [Appendix  I.]  It 
is  to  be  noted  that  only  seven  States — California,  Kentucky, 
Massachusetts,  Montana,  New  Jersey  and  Ohio — have  modern 
laws  in  respect  to  the  storage  of  explosives,  and  that  even  in 
these  States  there  is  considerable  room  for  improvement. 

The  following  reports  and  specifications  for  magazines  used 
by  the  field  force  of  the  Bureau  of  Mines  are  of  interest  and  may 
be  useful  to  State  officials  who  have  to  do  with  the  administra- 
tion of  explosive  regulations. 

Particular  attention  is  called  to  the  lock  specifications.  It 
was  a  common  occurrence  to  find  a  substantial  brick  magazine 
with  heavy  iron  doors  locked  with  a  ten-cent  padlock. 

The  standard  mortise  type  or  rim  type  locks  were  required 
on  all  magazines  except  Portable  Box  Magazines.  The  box 
magazine  is  used  for  storing  small  quantities  of  explosives  and 
on  such  magazines  certain  types  of  padlocks  were  permitted. 


FEDERAL  REGULATION  OF  EXPLOSIVES  445 

The  American  Table  of  Distances  is  also  appended. 
(Appendix  I,  Present  State  Laws  Regarding  Explosives.) 
(Appendix  II,  Form  of  Report  of  Magazine  Inspection,  Speci- 
fications for  Various  Types  of  Magazines,  and  American  Table 
of  Distances.) 

APPENDIX  I 

Synopsis  of  State  Laws  and  Municipal  Regulations  Covering  the 
Manufacture,  Storage,  Sale,  Etc.,  of  Explosives 

ALABAMA 

No  record  of  any  laws  regulating  the  manufacture,  storage  and  use  of 
explosives.  Alabama  has  copied  the  Interstate  Commerce  Commission 
regulations  for  transportation  by  common  carrier.  Alabama  has  an  act 
regulating  the  mining  of  coal,  which  goes  into  the  question  of  storing 
explosives  around  mines  and  conditions  under  which  explosives  may  be 
used  around  mines.  Wooden  structures  for  mine  magazines  are  pro- 
hibited, but  small  portable  magazines  may  be  locked  in  wooden  boxes. 
The  American  table  of  distances  has  not  been  adopted. 

Birmingham.  Ordinance  prohibits  the  manufacture,  keeping,  use,  sale, 
storage  or  transportation  without  a  permit  or  license  from  the  Mayor  or 
Alderman. 

Mobile.  Prohibits  the  manufacture,  sale,  having,  keeping,  transporta- 
tion or  use  of  explosives  within  the  city,  without  making  application  to 
and  obtaining  a  license  from  the  Chief  of  the  Fire  Department. 

ALASKA 

Laws  only  partially  cover  the  transportation  of  explosives.  No  munic- 
ipal regulations  known. 

ARIZONA 

No  record  of  any  State  laws  regulating  the  manufacture,  storage,  use 
and  possession  of  explosives. 

ARKANSAS 

No  record  of  any  law  covering  the  manufacture,  storage,  use  and  dis- 
position of  explosives.  Act  of  April  13,  1903,  covering  the  sale  of 
explosives. 

CALIFORNIA 

State  law  contains  quantity  and  distance  tables  identical  with  those 
in  suggested  State  law  compiled  by  the  Institute  of  Makers  of  Explo- 
sives, except  that  the  number  of  blasting  caps  is  limited  to  2,500,000  and 
the  quantity  of  other  explosives  to  300,000  pounds. 

San  Francisco.  Ordinance  limits  amount  which  may  be  brought  into, 
stored,  had  or  kept  within  the  city  limits.  Prohibits  manufacture. 


446         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Ordinance  applicable  to  local  retail  sales  and  use  within  the  city  limits. 
Senate  Bill  454,  Chapter  201,  Law  for  1913,  relating  to  the  malicious 
use  of  explosives,  and  makes  it  a  felon  punishment  by  imprisonment  to 
maliciously  use,  place,  deposit,  explode,  or  attempt  to  explode,  explosives 
at,  in,  under,  near,  or  take  into  or  near  any  building,  vessel,  boat,  rail- 
road, tram  road,  cable  road,  train,  car,  depot,  stable,  theatre,  school- 
house,  church,  dwelling  or  other  place  of  human  habitation  where  people 
assemble,  pass  or  repass. 

COLORADO 

No  modern  State  law  regulating  the  manufacture,  storage,  use  and  sale 
of  explosives. 

Colorado  mining  laws  cover  the  use  of  permissible  powders  in  certain 
coal  mines. 

House  Bill  166,  Law  of  1913,  amend  the  Revised  Statutes  of  the  State, 
delegating  powers  to  incorporated  towns  and  cities  to  regulate  or  prevent 
the  storage  or  the  transportation  of  powder  within  the  corporate  limits. 

Boulder.  Ordinance  regulating  storage  and  handling  of  explosives 
within  the  city  requires  that  the  Fire  Department  be  notified  where 
storage  is  had,  with  the  privilege  of  access  thereto. 

Canon  City.  Regulates  the  amount  of  explosives  that  may  be  stored 
within  the  city  limits. 

Denver.  Regulates  the  storage  of  explosives  within  the  city.  Requires 
that  a  permit  be  issued  by  the  Fire  and  Police  Departments  therefor. 
Requires  police  force  to  confiscate  explosives  unlawfully  had  or  kept 
within  the  city. 

CONNECTICUT 

General  Statutes.  It  is  prohibited  to  manufacture  or  store  explosives 
near  another  person's  property  in  quantities  sufficient  to  endanger  the 
lives  or  safety  of  persons  or  to  endanger  their  property. 

No  person  shall  manufacture,  store,  sell  or  deal  in  explosives,  etc., 
unless  he  shall  first  obtain  from  the  Fire  Marshal  of  the  town  where  such 
business  is  conducted  a  written  license  therefor,  etc. 

No  person  shall  procure,  transport  or  use  any  explosives  without  first 
obtaining  a  written  permit  therefor  signed  by  the  town  clerk  or  select- 
man of  the  town  where  the  same  is  to  be  used  or  kept  for  sale.  Such 
license  shall  specify  the  amount  and  purpose  for  which  it  is  intended. 
Licenses  renewable  annually.  License  fee  $5.00. 

The  selectman  and  town  clerks  are  delegated  to  issue  licenses  for  the 
storage  and  keeping  of  explosives  within  their  jurisdiction. 

Hartford.  Regulations  cover  transportation  and  storage  within  the 
city  limits.  Require  that  application  be  made  to  the  Board  of  Fire  Com- 
missioners, and  license  issued  by  them,  for  the  keeping,  storage  or  use 
in  the  city.  Limits  the  amount  that  may  be  stored.  Chief  of  the  Fire 
Department  to  be  delegated  to  seize  explosives  unlawfully  had  or  kept 
in  the  city. 


FEDERAL  REGULATION  OF  EXPLOSIVES  447 

DELAWARE 

Law  enacted  March  16,  1863,  forbids  loading  of  gunpowder  into  cars 
within  100  yards  of  any  regular  railroad  track  used  in  carrying  pas- 
sengers. 

No  State  laws  regulating  the  manufacture,  storing  and  keeping  of 
explosives. 

Wilmington.  Limits  the  amount  that  may  be  had,  kept  or  brought  into 
the  city  and  requires  a  license  issued  by  the  Mayor. 

FLORIDA 

No  State  legislation  on  this  subject. 

Jacksonville.  Prohibits  the  keeping  or  bringing  within  the  city  certain 
high  explosives,  and  limits  the  amount  of  gunpowder  that  may  be  kept 
within  the  city.  Ordinance  requires  that  the  inspector  be  notified  and 
his  consent  obtained  for  the  keeping  within  the  city. 

Miami.  Limits  the  amount  of  explosives  which  may  be  kept  within 
the  city  limits.  Prohibits  the  use  of  explosives  within  the  city  limits 
without  a  permit  from  the  city  clerk  indorsed  by  the  Mayor. 

GEORGIA 

No  record  of  any  law  other  than  the  Revised  Criminal  Statutes. 

Albany.  Delegates  to  the  Chief  of  the  Fire  Department  authority  to 
approve  storage,  and  limits  the  amount  of  explosives  that  may  be  stored 
within  city  limits. 

Atlanta.  Limits  the  amount  that  may  be  stored  within  the  city  limits. 
Requires  that  any  person  desiring  to  sell  powder  shall  petition  the  Gen- 
eral Council  for  a  license  and  obtain  such  license  from  the  clerk  of  the 
Council.  License  good  for  one  year. 

IDAHO 

There  is  no  law  other  than  police  regulations  regulating  the  manufac- 
ture, storage  or  use  of  explosives  in  the  State. 

ILLINOIS 

Coal  mining  law  regulates  to  a  certain  extent  the  use,  keeping  and 
storing  of  explosives  around  mines. 

Illinois  has  a  State  Fire  Marshal  law.  Senate  Bill  No.  57,  approved 
June  15,  1909.  Vol.  1,  Chapter  38,  page  1276,  regulates  all  manufacture, 
transportation  and  sale  of  explosives. 

Galena.    Limits  the  amount  that  may  be  stored  within  the  city  limits. 

Springfield.  Requires  a  permit  to  keep,  sell,  give  away  or  have  explo- 
sives within  the  city,  to  be  issued  by  the  City  Council  and  signed  by  the 
Mayor  and  clerk.  Permit  limits  the  amount  that  may  be  had  or  kept 
within  the  city.  Makes  it  a  penalty  to  conceal  or  falsely  mark  explosives. 

INDIANA 

It  is  unlawful  to  store  explosives  in  any  quantity  greater  than  100 
pounds  within  the  limits  of  any  municipal  corporation  or  within  40  rods 


448         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  any  occupied  dwelling  house  or  public  building  without  having  obtained 
in  writing  the  consent  of  the  adjacent  land  owners. 

Evansville.  Prohibits  the  storage  of  or  keeping  of  explosives  within 
the  city  limits. 

Indianapolis.  Limits  the  amount  of  explosives  that  may  be  kept  within 
the  city  limits.  Delegates  authority  to  the  Chief  Fire  Engineer  to  insti- 
tute search  when  it  is  suspected  explosives  are  kept  in  violation  of  city 
ordinance. 

IOWA 

No  record  of  any  State  laws  regulating  the  manufacture,  storage  or 
transportation  of  explosives. 

Iowa  has  a  State  Fire  Marshal's  law  delegating  the  Fire  Marshal  to 
investigate  explosions  as  a  result  of  fires. 

Revised  Statutes  of  Iowa  delegate  authority  to  cities  and  towns  to 
make  regulations  governing  the  keeping,  storing,  etc.,  of  explosives. 

Des  Moines.  Ordinance  limits  the  quantity  of  explosives  which  may 
be  kept  in  the  city.  Designates  the  character  of  magazine  and  provides 
penalty  for  violation.  The  marshal  is  delegated  to  enforce  the  ordinance. 

Fort  Dodge.  Ordinance  limits  the  amount  of  explosives  which  may  be 
had,  kept  or  stored  within  the  city  limits. 

KANSAS 

Kansas  Mining  Laws  regulate  the  storage,  handling,  etc.,  of  explosives. 
Topeka.    House  Bill  217,  Law  of  1913. 

Pittsburgh.  Have  local  ordinance  regulating  the  transportation  and 
storage  of  explosives  within  the  city  limits. 

KENTUCKY 

Law  of  August  8,  1916,  includes  Table  of  Distances  for  50  to  10,000 
pounds,  identical  with  American  Table  of  Distances. 

Kentucky  has  Fire  Marshal  Act,  though  the  authority  of  the  Fire 
Marshal  is  somewhat  limited. 

Louisville.  Has  an  ordinance  limiting  the  amount  of  explosives  that 
may  be  had  or  kept  within  the  city  limits,  and  prohibits  the  manufacture 
within  the  city  limits;  requires  a  license  to  store  or  sell. 

LOUISIANA 

No  State  regulations  concerning  the  manufacture,  storage  and  trans- 
portation of  explosives.  The  penal  code  delegates  authority  to  cities, 
towns,  etc.,  to  make  necessary  police  regulations. 

New  Orleans.  Limits  the  amount  which  may  be  stored  to  25  pounds; 
also  the  amount  which  may  be  transported  within  the  city  limits  to  1,250 
pounds.  Requires  permission  of  the  police  jury  for  the  establishment  of 
magazines  and  storage  of  explosives.  License  necessary  to  transport 
within  city. 

Shreveport.  Limits  the  amount  of  explosives  that  may  be  had,  kept, 
stored  or  transported  within  the  city  limits,  and  requires  a  permit  or 
license  from  the  City  Council. 


FEDERAL  REGULATION  OF  EXPLOSIVES  449 

MAINE 

No  State  regulations  concerning  the  manufacture,  storage  and  trans- 
portation of  explosives. 

MARYLAND 

Baltimore.  Has  complete  regulations  prohibiting  the  manufacture  and 
regulating  the  transportation,  storage,  sale  and  use  of  explosives  within 
the  city  limits;  permits  or  licenses  are  issued  by  the  City  Engineer. 

MASSACHUSETTS 

Law  of  January,  1909,  contains  several  tables  of  distances  covering 
quantities  up  to  100,000  pounds,  and  the  distances  vary  according  to  the 
different  conditions  to  be  met,  but  as  a  rule  are  greater  than  those  recom- 
mended in  the  American  Table  of  Distances. 

MICHIGAN 

Has  State  Fire  Marshal  law. 

Detroit.  Ordinance  prohibiting  bringing  within  the  city  limits  explo- 
sives as  defined  in  the  act,  but  does  not  interfere  with  interstate  com- 
merce by  common  carrier. 

Saginaw.  Prohibits  the  manufacture  and  limits  the  amount  of  explo- 
sives that  may  be  stored  within  the  city.  Permission  of  the  Common 
Council  and  a  license  necessary,  subject  to  the  approval  of  the  Chief  of 
the  Fire  Department. 

MINNESOTA 

Has  a  Fire  Marshal's  act.  Fire  Marshal  is  delegated  to  make  rules 
covering  the  storage,  sale  and  use  of  combustibles  and  explosives. 

Section  727,  Council — Powers — Ordinances.  The  village  Council  shall 
be  composed  of  five  members,  of  whom  three  shall  be  a  quorum;  and 
shall  have  power  to  adopt,  amend  or  repeal  all  such  ordinances,  rules 
and  by-laws  as  it  shall  deem  expedient  for  the  following  reasons:  Fire 
prevention,  to  regulate  the  storage  of  gunpowder  and  other  dangerous 
materials. 

Section  4891,  Chapter  97.  Keeping  gunpowder  unlawful — death  re- 
sulting. Every  person  who  shall  make  or  keep  gunpowder  or  other 
explosive  substances  in  a  city  or  village  in  any  quantity  or  manner 
prohibited  by  law  or  by  the  ordinance  of  such  municipality,  if  any 
explosion  thereof  shall  occur,  whereby  the  death  of  a  human  being  is 
occasioned,  shall  be  guilty  of  manslaughter  in  the  second  degree. 

St.  Paul.  No  person  shall  keep,  sell,  give  away  any  explosives  within 
the  city  without  first  obtaining  from  the  Common  Council  or  city  clerk 
permission  to  do  so.  The  amount  that  may  be  kept  is  limited  to  25 
pounds. 

Minneapolis.  Limits  the  amount  of  explosives  which  may  be  had  or 
kept  within  the  city  limits.  No  designated  official  for  enforcement  of 
this  ordinance. 


450         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Eveleth.  Limits  the  amount  of  explosives  that  may  be  had  or  kept 
within  the  city  limits.  Permit  necessary. 

Duluth.  Requires  a  permit  issued  by  the  Board  of  Fire  Commissioners 
for  having,  keeping  or  use  of  explosives  within  the  city  limits.  Quantity 
permissible  limited. 

Hibbing.  Prohibits  the  keeping  of  explosives  within  the  city  without 
a  permit  issued  by  the  village  Council,  and  limits  the  amount  which 
may  be  kept  within  the  city  limits. 

Nashwauk.  Delegates  authority  to  the  Fire  Warden  to  make  such 
changes  or  methods  in  keeping  or  storing  explosives  as  public  safety 
requires. 

Virginia.  Requires  written  permit  from  the  Chief  of  the  Fire  Depart- 
ment to  keep  explosives  in  quantities  greater  than  5  pounds  within  the 
city  limits. 

MISSISSIPPI 

No  record  of  any  law  regulating  the  manufacture,  sale,  storage,  etc., 
of  explosives.  Penal  Code  covers  unlawful  use  or  possession  of  explo- 
sives, false  or  deceptive  marking,  etc. 

Jackson.  Limits  the  amount  of  gunpowder  and  explosives  to  50 
pounds  which  may  be  kept  within  the  city  limits.  Requires  that  any  per- 
son, firm  or  corporation  desiring  to  sell  or  store  explosives  obtain  a 
permit  from  the  Chief  of  the  Fire  Department. 

MISSOURI 

St.  Louis.  Has  an  ordinance  specifying  quantity  of  explosives  that  may 
be  kept  within  the  city  limits,  requiring  that  sign  be  displayed,  how 
carried  on  streets,  time  within  which  it  may  be  kept,  penalty  for  bring- 
ing in  concealed  explosives,  warrants  may  be  issued,  penalty  for  violating 
ordinances.  Fire  Marshal  is  given  authority  to  enforce  ordinance. 

St.  Joseph.  Has  an  ordinance  limiting  the  amount  that  may  be  had 
or  kept  within  the  city  and  has  penalty  for  violation  of  ordinance,  and 
delegates  authority  to  the  Chief  of  Police  for  enforcement. 

Springfield.  Has  an  ordinance  limiting  the  amount  that  may  be  had, 
kept  or  stored  within  the  city  limits.  No  one  delegated  to  enforce  it. 

Kansas  City.  Has  an  ordinance  regulating  the  amount  that  may  be 
had,  kept  or  stored  within  the  city.  The  Chief  of  the  Fire  Department 
is  delegated  to  issue  license  or  permit  and  enforce  the  ordinance. 

Aurora  and  other  cities  in  this  district  of  Southwestern  Missouri  have 
ordinances  regulating  the  storage  and  sale  of  explosives  within  city 
limits.  License  necessary  in  each  city. 

MONTANA 

Suggested  State  law  compiled  by  Institute  of  Makers  of  Explosives 
containing  tables  of  quantity  and  distances  was  adopted  February  27, 
1917. 

NEBRASKA 

No  record  of  any  modern  law. 

Omaha.     Has   an   ordinance  prohibiting  the   manufacture,   having  or 


FEDERAL  REGULATION  OF  EXPLOSIVES  451 

keeping  of  explosives  within  the  city  limits  without  a  license.     License 
issued  by  the  Chief  Engineer  of  the  Fire  Department. 

NEVADA 

Has  no  modern  explosives  legislation.  The  Criminal  Code  applicable  to 
unlawful  manufacture,  possession  or  use  of  explosives.  Police  regula- 
tions in  cities  cover  local  conditions. 

NEW  HAMPSHIRE 

No  record  of  any  modern  law. 

NEW  JERSEY 

Has  modern  law  regulating  storage  as  well  as  explosive  plant  opera- 
tion. Law  of  April  27,  1911,  makes  500,000  pounds  the  maximum 
quantity  which  may  be  stored  in  any  factory  building  or  magazine,  and 
the  minimum  distances  prescribed  for  lesser  quantities  are  practically 
the  same  as  those  suggested  by  the  Institute  of  Makers  of  Explosives. 
Law  administered  by  Commissioner  of  Labor.  Statutes  delegate  power 
to  counties  and  boroughs  to  regulate  or  prohibit  the  manufacture,  sale, 
storage,  keeping  or  having  of  explosives  within  village  or  borough 
limits. 

Jersey  City.  Has  complete,  comprehensive  explosive  regulations  gov- 
erning transportation,  sale,  storage  and  use  of  explosives.  License  and 
permit  necessary.  Application  for  license  and  permit  to  be  made  to 
Inspector  of  Combustibles  and  Fire  Risks. 

Hoboken.  Has  ordinance  regulating  the  storage,  sale,  etc.,  of  explo- 
sives. Requires  a  permit  issued  by  the  Chief  Engineer  of  the  Fire  Depart- 
ment. 

Newark.  Has  an  ordinance  regulating  the  manufacture,  storage,  sale, 
transportation,  use  and  disposition  of  explosives.  Requires  a  permit 
issued  by  the  Inspector  of  Combustibles. 

Passaic.  Has  an  ordinance,  that  no  person  shall,  without  permission 
from  the  City  Council  first  obtained,  store  or  keep  or  permit  to  be  stored 
or  kept  within  the  limits  of  Passaic  any  explosives  or  spontaneously  com- 
bustible materials  in  quantities  greater  than  10  pounds. 

Phillipsburg.  Prohibits  the  manufacture,  keeping  or  storing  of  explo- 
sives within  the  city  limits. 

NEW  MEXICO 

No  recent  legislation  relative  to  the  manufacture,  storing,  keeping, 
etc.,  of  explosives.  State  Code  delegates  authority  to  cities  to  enact 
necessary  police  regulations  for  the  manufacture,  sale,  storage,  keeping, 
transportation  or  use  of  explosives. 

NEW  YORK 

Law  of  April  7,  1915,  limits  quantity  of  explosives  which  may  be  stored 
to  300,000  pounds,  and  the  distance  prescribed  for  lesser  amounts  con- 
forms with  the  American  Table  of  Distances. 


452         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Explosives  used  by  farmers  for  agricultural  purposes  are  exempt  under 
this  law,  unless  the  Governor  by  proclamation  under  Section  235  of  this 
act  desires  to  include  them. 

Under  the  explosives  law  municipalities  may  promulgate  more  strin- 
gent regulations,  but  may  not  enforce  or  promulgate  less  stringent 
regulations  than  required  by  State  law. 

New  York  City  and  the  Borough  of  Manhattan  have  complete  explo- 
sive and  combustible  regulations  under  the  jurisdiction  of  the  Fire  Com- 
missioner, to  whom  application  must  be  made  for  a  license  and  permit 
to  sell,  have,  keep,  transport,  store,  use  or  manufacture. 

Buffalo.  Has  explosives  regulations.  Requires  an  application  for  a 
license  to  have,  keep,  sell,  store,  transport  or  use,  to  be  made  to  the 
Chief  Engineer  of  the  Fire  Department,  who  is  delegated  to  issue  such 
license. 

Yonkers.  Has  complete  fire  and  combustible  regulations.  Application 
must  be  made  to  the  Bureau  of  Combustibles  for  a  license  or  permit  to 
manufacture,  sell,  have,  keep,  store,  use  or  transport  explosives. 

Albany.  Has  regulations  limiting  the  amount  that  may  be  had,  kept, 
stored  or  transported,  and  requires  that  application  for  license  be  made 
to  the  Commissioner  of  Public  Safety. 

NORTH  CAROLINA 

Chapter  81,  Section  3817.    Dynamite. 

"Selling  without  a  license.  If  any  dealer  or  any  person  shall  sell  or 
keep  for  sale  any  dynamite,  bombs,  or  other  combustibles  of  a  like 
nature,  without  first  having  obtained  from  the  Board  of  Commissioners 
of  the  county  where  such  person  or  dealer  resides  a  license  for  that  pur- 
pose, he  shall  be  guilty  of  a  misdemeanor." 

Section  3794. 

"If  any  person  shall  fire  off,  'explode  or  cause  to  be  fired  off  or  exploded, 
except  for  mechanical  purposes,  in  a  legitimate  business,  any  dynamite, 
bombs  or  other  explosives,  he  shall  be  guilty  of  a  misdemeanor." 

NORTH  DAKOTA 

No  State  law  regulating  the  manufacture,  storage,  sale  and  disposition 
of  explosives. 

OHIO 

Has  a  State  law  limiting  the  amount  that  may  be  stored  within  city 
limits  and  the  amounts  that  may  be  stored  within  certain  distances  beyond 
city  limits.  Requires  application  for  a  magazine  and  the  procuring  of 
a  certificate.  Law  is  administered  by  Industrial  Commission  under  the 
jurisdiction  of  the  chief  inspector  of  workshops,  factories  and  explosives, 
office  Columbus.  Law  of  May  10,  1919,  contains  table  of  quantity  and 
distances  suggested  by  the  Institute  of  Makers  of  Explosives. 

Columbus.     Ordinance  requires  keeping  of  a  record. 

Cincinnati.    Ordinance  requires  license  for  magazines. 

Cleveland.  Ordinance  requires  application  to  be  made  to  the  Chief  of 
the  Fire  Department. 


FEDERAL  REGULATION  OF  EXPLOSIVES  453 

OKLAHOMA 

Ordinance  regulates  the  location  of  magazines  within  the  State.  Appli- 
cation must  be  made  to  and  certificate  obtained  from  Chief  Mine 
Inspector. 

Oklahoma  City.  Has  an  ordinance  regulating  the  storage  and  sale 
within  the  city  and  requires  that  the  marshal  be  notified. 

A  few  other  cities  in  Oklahoma  have  explosives  regulations  limiting  the 
amount  that  may  be  stored  or  kept  in  the  city,  but  have  no  very  com- 
plete machinery  to  enforce  the  law. 

OREGON 

There  is  no  record  of  any  law  regulating  the  manufacture,  storage, 
sale,  handling,  disposition,  etc.,  of  explosives  within  the  State. 

Portland.  Has  an  ordinance  delegating  authority  to  the  harbor  master 
with  reference  to  the  loading,  unloading,  or  keeping  of  explosives  along 
the  city  water  front.  Prohibits  the  manufacture  of  explosives  within 
the  city  limits  and  limits  the  amount  of  explosives  that  may  be  had  or 
kept  within  the  city. 

Grants  Pass.  Has  an  ordinance  regulating  the  storage  and  keeping 
of  explosives  within  the  city  limits,  and  delegates  authority  to  City  Mar- 
shal or  any  policeman  to  enforce  it. 

PENNSYLVANIA 

No  record  of  any  explosives  law  regulating  the  manufacture,  storage, 
transportation,  etc.,  of  explosives.  The  State  Industrial  Board  has  juris- 
diction over  inter-plant  risks.  A  majority  of  the  boroughs  in  which 
explosives  are  used  have  ordinances  enforced  by  the  chief  burgess  or 
town  clerk,  to  whom  application  should  be  made  and  license  obtained. 

Philadelphia.  Complete  regulations.  Application  to  be  made  to  and 
license  obtained  from  the  Fire  Marshal. 

Pittsburgh.  Application  to  be  made  to  and  license  obtained  from  the 
Inspector  of  Explosives. 

Eastern.  Application  to  be  made  to  and  license  obtained  from  the 
Building  Inspector. 

The  Chief  of  the  Bureau  of  Mines  has  certain  delegated  authority  with 
reference  to  explosives  stored,  handled  and  used  around  mines  in  the 
State.  Pennsylvania  Criminal  Code  covers  almost  every  possible  unlaw- 
ful act  that  may  be  committed  with  explosives. 

RHODE  ISLAND 

No  record  of  any  explosives  law  relating  to  the  manufacture,  sale, 
storage  and  use  of  explosives.  Very  few  explosives  used  in  the  State. 

In  the  State  the  town  clerk  or  selectmen  are  designated  to  issue  license 
or  permit. 

SOUTH  CAROLINA 

The  Railroad  Commission  of  South  Carolina  issued  circular  prescribing 
Interstate  Commerce  Commission  Regulations  for  intrastate  shipments  of 
explosives  and  other  dangerous  articles. 


454         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

SOUTH  DAKOTA 

No  record  of  any  law  regulating  the  manufacture,  storage,  sale,  etc., 
other  than  the  requirement  of  keeping  a  record  of  sale  and  that  the  pur- 
chaser must  be  personally  known  to  or  properly  introduced  to  the  vendor. 

TENNESSEE 

No  record  of  any  modern  law  regulating  the  manufacture,  storage,  dis- 
position or  sale  of  explosives. 

Nashville.  Has  an  ordinance  regulating  the  storage  and  sale  of  explo- 
sives within  the  city  limits.  No  specific  authority  delegated  for  enforce- 
ment. 

Chattanooga.  Has  an  ordinance  regulating  the  manufacture,  storage, 
sale,  etc.,  within  the  city.  Application  for  a  license  to  be  made  to  Com- 
missioner of  Fire  and  Police  and  a  permit  obtained. 

Jellicoe.  Has  an  ordinance  regulating  the  storage  of  explosives.  No 
specific  authority  delegated  for  enforcement. 

Knoxville.  Has  an  ordinance  governing  the  sale  of  explosives.  Re- 
quires that  application  be  made  to  and  license  obtained  from  recorder  of 
city. 

Memphis.  Has  an  ordinance  regulating  the  storage  within  the  city. 
Authority  for  enforcement  delegated  to  Chief  of  Police  and  Wharf- 
master. 

TEXAS 

No  record  of  any  modern  law  regulating  the  manufacture,  storage, 
sale,  etc.,  of  explosives.  Circular  issued  by  the  Railroad  Commission  of 
Texas  adopting  the  Interstate  Commerce  Commission  Regulations  for 
the  control  of  railroads  and  other  common  carriers  doing  business  in  the 
State  of  Texas. 

San  Antonio.  Has  an  ordinance  regulating  the  transportation  and 
storage  of  explosives  in  the  city.  Authority  delegated  to  the  City  Mar- 
shal. 

UTAH 

No  record  of  any  modern  law  regulating  the  manufacture,  transporta- 
tion, storage,  sale  or  disposition  of  explosives.  Criminal  Code  covers 
unlawful  use  or  possession. 

Ogden.  Has  an  ordinance  regulating  storage,  etc.,  in  the  city.  Applica- 
tion made  and  license  issued  by  City  Council. 

VERMONT 

No  record  of  any  modern  law  regulating  the  manufacture,  storage, 
sale,  disposition,  use,  etc.,  of  explosives.  Criminal  Code  applicable  to 
unlawful  use  or  possession. 

VIRGINIA 

No  record  of  any  modern  State  law  regulating  the  manufacture,  stor- 
age, sale,  disposition  or  use  of  explosives.  Interstate  Commerce  Com- 
mission Regulations  for  the  transportation  of  explosives  govern  and 


FEDERAL  REGULATION  OF  EXPLOSIVES  455 

are  binding  on  all  common  carriers  engaged  in  interstate  commerce. 
Authority  delegated  to  cities,  towns  and  villages  to  make  necessary  police 
regulations. 

Richmond.  Has  modern  ordinance.  Application  made  to  and  license 
obtained  from  Chief  Engineer  of  the  Fire  Department. 

Clifton  Forge.  Has  ordinance  limiting  amount  of  storage.  No  specific 
authority  delegated  for  enforcement. 

WASHINGTON 

There  is  no  record  of  any  modern  law  regulating  the  manufacture, 
transportation,  storage,  sale  and  disposition  of  explosives.  Criminal 
Code  applicable  to  unlawful  use.  State  mining  laws  incompletely  apply 
to  storing  explosives  at  mines. 

Seattle.  Has  city  and  harbor  regulations  covering  transportation  and 
storage  within  city.  Harbor  regulations  administered  by  port  warden, 
to  whom  application  should  be  made  and  from  whom  license  is  obtained. 
Within  city  limits  application  should  be  made  to  Chief  Engineer  of  the 
Fire  Department  and  license  obtained  from  him. 

WEST  VIRGINIA 

No  record  of  any  modern,  up-to-date  explosives  law  regulating  the 
manufacture,  storage,  sale,  disposition,  use,  etc.,  of  explosives.  State 
Mining  Code  partially  applicable  to  use  of  explosives  around  mines.  A 
paragraph  requires  magazines  to  be  located  300  feet  from  any  mine 
opening  or  building  used  or  occupied  by  any  person  or  persons. 

Charleston.  Has  ordinance  regulating  the  amount  that  may  be  trans- 
ported or  stored  within  the  city.  Application  made  to  and  license 
obtained  from  Mayor  or  city  clerk. 

WISCONSIN 

Fire  Marshal  act  delegates  authority  to  the  State  Fire  Marshal  to 
make  rules  and  regulations  covering  the  storage,  sale  and  use  of  explo- 
sives within  city  limits.  So  far  State  Fire  Marshal  has  only  limited  the 
amount  that  may  be  stored  in  cities,  and  requires  an  application  to  be 
made  to  and  license  obtained  from  the  city  and  town  clerk,  Chief  or 
Chief  Engineer  of  the  Fire  Department. 

WYOMING 

Consent  for  the  storage  of  more  than  50  pounds  of  explosives  within 
a  specified  distance  must  be  obtained  from  the  Board  of  County  Com- 
missioners. 

PHILIPPINE  ISLANDS 

Storage  under  military  regulations  in  Government  magazines.  License 
or  permit  necessary  for  withdrawal  or  disposition. 

PORTO  RICO 

Spanish  explosives  regulation  still  in  effect.  Permit  necessary  for  the 
sale  or  use  of  explosives. 


456         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


APPENDIX  II 

REPORT  OF  MAGAZINE  INSPECTION 
Bureau  of  Mines — Explosives  Regulation 

Proprietor  or  owner  of  magazine License  No 

Location.. Date  of  inspection.. ..Files. 

Shipping  station 

Railroads  over  which  outward  shipments  are,  or  may  be  made 


Manufacturer  of  material  stored .  .  .  _  .Watchman 


fDay__ 

1  Night. 


Material  (construction) . 


Repair Dimensions Location  of  U.  S.  signs. 

Relative  location  nearest  railroad  tracks,  mine  openings,  dwellings,  etc 


(See  Table  of  Distances,  and  if  within  prescribed  limits,  report  relative  intervening  ground,  etc.) 


CONTENTS. 

SUPERVISION  OF  MAGAZINE. 

Note.  —  Violations  checked  (\)  have  been  found 
on  this  inspection. 

1  .  Quantity  and  kind  of 
explosives  stored  

Floor  of  magazine  is 
not  clean  

Magazine  keeper  is  not 
shipping  out  old 
stocks  first  _ 

2.  Length  of  storage  of 
oldest    material    on 

Open  packages  of  ex- 
plosives are  kept  in 
magazine  

Explosives  are  not 
carefully  handled  or 
stored  

Magazine    is    not    in- 
spected   at    regular 
intervals    by    care- 
taker   

Loose  tools  are  kept  in 
magazine 

3.  (a)  Do   boxes   show 
signs  of  exudation,  or 
packages  leakage  of 
contents?  

to--- 

(ft)  — 

(c)  ... 

(a)  Magazine  rules  are 
not  posted  
(6)  Teamsters  are  not 
provided  with  rules 

(a).... 
(6)-... 

Empty  dynamite 
boxes  are  not  de- 
stroyed   

(6)  Do  cartridges?  _ 

Explosives   are   packed 
or    repacked    in    or 

Blasting  caps  are 
stored  with  high  ex- 

(c)  Give  brand  and 
date  marks  of  such 
packages  

Condemned  explosives 
are  piled  with  salable 
stock 

Oil  lamps  or  lanterns 
are  used  in  maga- 
zines   

4.  Protection  against 
entrance: 
(a)  Condition  and 

(a)                                                  .           -.  

(6)  Type    and    loca- 
tion of  locks 

(6)                                                                          

(c)  Type    and    loca- 
tion of  hinges 

(c)                                                                                            _     _. 

(d)  Hasps  properly 
secured?.-. 

W)  -- 

U.  S.  Explosives  Inspector. 


FEDERAL  REGULATION  OF  EXPLOSIVES  457 

Types  of  Magazines 

Portable  box  magazine  may  be  either  of  the  following  types,  and  in 
any  case  should  be  locked  with  one  of  the  below-listed  approved  padlocks 
with  steel  shackles: 

Eagle  bronze  padlock  No.  04186-S. 

Eagle  galvanized  steel  padlock  No.  4378-H. 

Yale  &  Towne  bronze  padlocks  Nos.  840  and  850  (!%"  and  2"). 

First,  a  box  made  of  2"  hardwood,  dressed  on  the  inside;  all  fastenings, 
such  as  hinges,  hasps  and  handles,  to  be  put  on  with  bolts  having  nuts  on 
the  inside  of  box  and  so  countersunk  in  the  wood  that  no  metal  pro- 
trudes. The  outside  of  the  box  to  be  covered  with  No.  14  flat  iron,  which 
shall  cover  the  fastenings  and  bolts  of  the  hinges  and  hasps.  The  hasp 
and  shackle  must  be  of  extra  strong  construction.  It  is  recommended 
that  casters  be  placed  under  the  box  in  order  to  facilitate  removal  in 
case  of  fire. 

Second,  portable  steel  boxes,  such  as  those  manufactured  by  Littleford 
Brothers,  Cincinnati,  Ohio,  or  any  other  make  of  equal  quality  or  strength, 
to  be  fastened  by  one  of  the  above-mentioned  padlocks. 

The  quantity  of  explosives  which  may  be  stored  within  the  corporated 
limits  of  any  city  or  town  will  be  governed  by  the  ordinances  of  such 
city  or  town  or  the  State  law.  Where  no  ordinances  or  law  exists,  not 
over  fifty  (50)  pounds  of  explosives  should  be  stored  within  said  limits; 
provided  that  greater  amounts  than  fifty  (50)  pounds  may  be  so  stored 
when  the  location  of  the  magazine  complies  with  the  American  Table 
of  Distances. 

(A.)  This  magazine  is  suitable  for  storage  of  black,  sporting  and 
smokeless  powders  only.  Your  magazine  should  fulfill  in  the  following 
details  the  recommendations  of  the  Bureau  of  Mines  standard  for  this 
type  and  be  located  in  conformity  with  the  American  Table  of  Distances. 

1.  Balloon  Type — Outside  walls  should  be  of  %"  dressed  stock,  laid 
diagonally  over  proper  studding,  covered  in  turn  by  26-gauge  galvanized 
flat  iron.     Inner  surface  should  be  of  7/8"  x  6"  dressed  boards  spaced 
6"  apart. 

2.  Floors  should  be  blind-nailed  or  with  countersunk  heads,  and  should 
have  at  least  a  2"  air  space  along  walls  to  afford  ventilation. 

3.  No  ceiling  necessary. 

4.  Roof  should  be  of  7/8"  T.  &  G.  or  shiplap  boards  overlaid  with 
26-gauge  corrugated  galvanized  iron. 

5.  Ventilators  should  be  of  either  the  Globe  or  Star  type  on  gable 
roofs,  or  of  a  dormer  type  with  louvres  or  "Venetian  blinds,"  covered  on 
the  inside  by  14  mesh  No.  21  wire  screen. 

6.  Doors  should  be  of  two  thicknesses  of  %"  dressed  boards,  laid 
diagonally,  covered  with  22-gauge  galvanized  flat  iron.    Hinges,  three  in 
number,  2"x%"  strap  type,  running  across  the  door  and  fastened  to 
it  with  1/&"x2}&"  bolts  with  nuts  on  the  inside.    Ends  of  hinge  pins  to 
be  "burred"  over  nuts  or  washers.     Locks  to  be  either  the  Du  Pont 
standard  mortise  type  or  the  Yale  &  Towne  Special  No.  7  Magazine  rim 
lock.    Locks  to  be  bolted  through  plate  and  wood  with  nuts  on  the  inside. 
If  Yale  &  Towne  lock  is  used,  specify  thickness  of  door  when  ordering. 


458         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

(B.)  This  magazine  is  suitable  for  storage  of  any  explosive;  but  caps, 
detonators,  etc.,  should  not  be  kept  with  dynamite,  powder,  etc.  Your 
magazine  should  fulfill  in  the  following  details  the  recommendations  of 
the  Bureau  of  Mines  standard  for  this  type,  and  be  located  in  conformity 
with  the  American  Table  of  Distances. 

1.  Sand  Cement  construction  to  be  not  stronger  than  one  part  Port- 
land cement  to  six  parts  sand,  to  be  poured  between  the  inner  and  outer 
sheathing  of  either   %"  of  T.   &  G.  or  shiplap  boards.     Thickness  of 
cement  wall  to  be  not  less  than  4".    Outside  of  building  to  be  sheathed 
with  either  26-gauge  galvanized  flat  or  corrugated  iron.    If  the  outside 
sheathing  of  wood  is  to  be  removed,  the  26-gauge  iron  is  not  necessary, 
but  the  thickness  of  cement  wall  should  be  increased  to  not  less  than  6". 

2.  Floors  should  be  blind-nailed  or  with  countersunk  heads,  and  should 
have  at  least  a  2"  space  along  the  walls  to  aiford  ventilation. 

3.  Ceilings  should  be  of  %"  T.  &  G.  or  shiplap  boards  of  good  quality 
nailed  over  joists,  then   covered  with  builder's  or  tar  paper  on  which 
should  be  spread  4"  of  clean  sand.    A  2"  space  should  be  left  all  around 
near  the  walls  for  ventilation. 

4.  Roof  should  be  of  % "  T.  &  G.  or  shiplap  boards  overlaid  with 
26-gauge  corrugated  galvanized  iron. 

5.  Ventilators  should  be  of  either  the  Globe  or  Star  type  for  gable 
roofs  or  of  a  dormer  type  with  louvres  or  "Venetian  blinds,"  covered  on 
the  inside  by  14  mesh  No.  21  wire  screen. 

6.  Doors  on  unbarricaded  magazines  should  be  of  three  layers  of  %" 
hardwood  boards,  sheathed  on  the  outside  with  not  less  than  %"  wrought 
iron  or  steel  plate.    Hinges  to  be  of  3"  x  %"  strap  type,  three  in  number, 
running  across  the  door,  bolted  through  plate  and  wood  with  %"  x  4" 
bolts  having  washers  and  nuts  on  the  inside.     End  of  hinge  pins  to  be 
"burred"  over  nut  and  washer.    Locks  to  be  either  the  Du  Pont  standard 
mortise  type  or  the  Yale  &  Towne  Special  No.  7  Magazine  rim  type. 
Locks  to  be  bolted  through  plate  and  wood  with  nuts  on  the  inside.    If  a 
Yale  &  Towne  lock  is  used,  specify  the  thickness  of  door  when  ordering. 

Doors  for  a  barricaded  magazine  should  consist  of  two  layers  of  boards 
diagonally  placed,  covered  with  22-gauge  galvanized  flat  iron.  Hinges 
same  as  above,  only  2"x%",  and  fastened  by  1/£"x21/£"  bolts.  Same 
choice  of  locks.  The  barricade  must  extend  so  that  a  bullet  fired  from 
any  direction  will  not  strike  the  door. 

(C.)  This  magazine  is  suitable  for  storage  of  any  explosive;  but  caps, 
detonators,  etc.,  should  not  be  kept  with  dynamite,  powder,  etc.  Your 
magazine  should  fulfill  in  the  following  details  the  recommendations  of 
the  Bureau  of  Mines  standard  for  this  type,  and  be  located  in  conformity 
with  the  American  Table  of  Distances. 

1.  Brick  Magazine — Brick  should  be  of  a  medium,  soft  variety,  laid  in 
cement  mortar  containing  not  over  25%  of  lime.  Foundations  should 
run  below  frost  line;  the  walls  above  ground  should  be  9"  thick.  Maxi- 
mum height  of  foundation  above  ground  not  over  2'  6"  under  door,  or 
less  than  1'  at  any  point.  Interior  wall  should  have  %"x6"  dressed 
lattice  lining  boards  spaced  6"  apart  and  fastened  to  2  x  2  studs,  nails 
countersunk. 


FEDERAL  REGULATION  OF  EXPLOSIVES  459 

2.  Floors  should  be  blind-nailed  or  with  countersunk  heads,  and  should 
have  at  least  a  2"  space  along  the  walls  to  afford  ventilation. 

3.  Ceilings  should  be  of  %"  T.  &  G.  or  shiplap  boards  of  good  quality 
nailed  over  joists,  then  covered  with  builder's  or  tar  paper  on  which 
should  be  spread  4"  of  clean  sand.    A  2"  space  should  be  left  all  around 
near  the  walls  for  ventilation. 

4.  Roof  should  be  of  %"  T.  &  G.  or  shiplap  boards  overlaid  with 
26-gauge  corrugated  galvanized  iron. 

5.  Ventilators  should  be  of  either  the  Globe  or  Star  type  for  gable 
roofs  or  of  a  dormer  type  with  louvres  or  "Venetian  blinds,"  covered  on 
the  inside  by  14  mesh  No.  21  wire  screen. 

6.  Doors  on  unbarricaded  magazines  should  be  of  three  layers  of  %" 
hardwood  boards,  sheathed  on  the  outside  with  not  less  than  %"  wrought 
iron  or  steel  plate.    Hinges  to  be  of  3"  x  %"  strap  type,  three  in  num- 
ber, running  across  the  door,  bolted  through  plate  and  wood  with  Vz"  x  4" 
bolts  having  washers  and  nuts  on  the  inside.    End  of  hinge  pins  to  be 
"burred"  over  nut  and  washer.    Locks  to  be  either  the  Du  Pont  standard 
mortise  type  or  the  Yale  &  Towne  Special  No.  7  Magazine  rim  type. 
Locks  to  be  bolted  through  plate  and  wood  with  nuts  on  the  inside.     If 
a  Yale  &  Towne  lock  is  used,  specify  the  thickness  of  door  when  ordering. 

Doors  for  a  barricaded  magazine  should  consist  of  two  layers  of  boards 
diagonally  placed,  covered  with  22-gauge  galvanized  flat  iron.  Hinges 
same  as  above,  only  2"x%",  and  fastened  by  %"x2%"  bolts.  Same 
choice  of  locks.  The  barricade  must  extend  so  that  a  bullet  fired  from 
any  direction  will  not  strike  the  door. 

(D.)  This  magazine  is  suitable  for  storage  of  any  explosive;  but  caps, 
detonators,  etc.,  should  not  be  kept  with  dynamite,  powder,  etc.  Your 
magazine  should  fulfill  in  the  following  details  the  recommendations  of 
the  Bureau  of  Mines  standard  for  this  type,  and  be  located  in  conformity 
with  the  American  Table  of  Distances. 

1.  Sand  Filled  Type — Walls  should  be  sheathed  inside  and  outside  with 
%"  T.  &  G.  or  shiplap  boards  of  good  quality,  allowing  at  least  a  6" 
space  between  to  be  filled  to  the  eaves  with  clean,  sharp,  coarse  sand, 
well  tamped.      (Gravel,  loam  or  crushed   stone  are  not  recommended.) 
The  outside  should  be  covered  with  26-gauge  galvanized  flat  iron  to  pro- 
tect against  fire  or  theft.    Where  magazines  are  surrounded  on  all  sides 
with  a  barricade  of  the  type  approved  by  the  Bureau  of   Mines,  the 
thickness  of  the  walls  may  be  reduced  and  the  sand  fill  omitted. 

2.  Floors  should  be  blind-nailed  or  with  countersunk  heads,  and  should 
have  at  least  a  2"  space  along  the  walls  to  afford  ventilation. 

3.  Ceilings  should  be  of  %"  T.  &  G.  or  shiplap  boards  of  good  quality 
nailed  over  joists,  then  covered  with  builder's  or  tar  paper  on  which 
should  be  spread  4"  of  clean  sand.    A  2"  space  should  be  left  all  around 
near  the  walls  for  ventilation. 

4.  Roof  should  be  of   %"  T.  &  G.  or  shiplap  boards  overlaid  with 
26-gauge  corrugated  galvanized  iron. 

5.  Ventilators  should  be  of  either  the  Globe  or  Star  type  for  gable 
roofs  or  of  a  dormer  type  with  louvres  or  "Venetian  blinds,"  covered  on 
the  inside  by  14  mesh  No.  21  wire  screen. 


460         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

6.  Doors  on  unbarricaded  magazines  should  be  of  three  layers  of  %" 
hardwood  boards,  sheathed  on  the  outside  with  not  less  than  %"  wrought 
iron  or  steel  plate.  Hinges  to  be  of  3"  x  % "  strap  type,  three  in  num- 
ber, running  across  the  door,  bolted  through  plate  and  wood  with  W  x  4" 
bolts  having  washers  and  nuts  on  the  inside.  End  of  hinge  pins  to  be 
"burred"  over  nut  and  washer.  Locks  to  be  either  the  Du  Pont  standard 
mortise  type  or  the  Yale  &  Towne  Special  No.  7  Magazine  rim  type. 
Locks  to  be  bolted  through  plate  and  wood  with  nuts  on  the  inside.  If  a 
Yale  &  Towne  lock  is  used,  specify  the  thickness  of  door  when  ordering. 

Doors  for  a  barricaded  magazine  should  consist  of  two  layers  of  boards 
diagonally  placed,  covered  with  22-gauge  galvanized  flat  iron.  Hinges 
same  as  above,  only  2"x%",  and  fastened  by  %"x21/&"  bolts.  Same 
choice  of  locks.  The  barricade  must  extend  so  that  a  bullet  fired  from 
any  direction  will  not  strike  the  door. 


American  Table  of  Distances 

It  is  recommended  that  all  storage  places  for  explosives  comply  with 
the  following: 


Pounds  of 
Explosives 

Inhabited 
Buildings 
Barricaded* 
(Feet) 

Public 
Railway 
Barricaded* 
(Feet) 

Public 
Highway 
Barricaded* 
(Feet) 

Pounds  of 
Explosives 

Inhabited 
Buildings 
Barricaded* 
(Feet) 

Public 
Railway 
Barricaded* 
(Feet) 

Pub'ic 
Highway 
Barricaded 
(Feet) 

50 

120 

70 

35 

50,000 

1,460 

875 

440 

100 

180 

110 

55 

55,000 

1,515 

910 

455 

200 

260 

155 

75 

60,000 

1,565 

940 

470 

300 

320 

190 

95 

65,000 

1,610 

970 

485 

400 

360 

215 

110 

70,000 

1,655 

995 

500 

500 

400 

240 

120 

75,000 

1,695 

1,020 

510 

600 

430 

260 

130 

80,000 

1,730 

1,040 

520 

700 

460 

275 

140 

85,000 

1,760 

1,060 

530 

800 

490 

295 

150 

90,000 

1,790 

1,075 

540 

900 

510 

305 

155 

95,000 

1,815 

1,090 

545 

1,000 

530 

320 

160 

100,000 

1,835 

1,100 

550 

1,500 

600 

360 

180 

125,000 

1,900 

1,140 

570 

2,000 

650 

390 

195 

150,000 

1,965 

1,180 

590 

3,000 

710 

425 

210 

175,000 

2,030 

1,220 

610 

4,000 

750 

450 

225 

200,000 

2,095 

1,260 

630 

5,000 

780 

470 

235 

225,000 

2,155 

1,295 

650 

6,000 

805 

485 

245 

250,000 

2,215 

1,330 

670 

7,000 

830 

500 

250 

275,000 

2,275 

1,365 

690 

8,000 

850 

510 

255 

300,000 

2,335 

1,400 

705 

9,000 

870 

520 

260 

325,000 

2,390 

1,435 

720 

10,000 

890 

535 

265 

350,000 

2,445 

1,470 

735 

15,000 

975 

585 

290 

375,000 

2,500 

1,500 

750 

20,000 

1,055 

635 

315 

400,000 

2,555 

1,530 

765 

25,000 

1,130 

680 

340 

425,000 

2,605 

1,560 

780 

30,000 

1,205 

725 

360 

450,000 

2,655 

1,590 

795 

35,000 

1,275 

765 

380 

475,000 

2,705 

1,620 

810 

40,000 

1,340 

805 

400 

500,000 

2,755 

1,650 

825 

45,000 

1,400 

840 

420 

*  Barricaded,  as  here  used,  signifies  that  the  building  containing  explosives  is  screened  from 
other  buildings,  railways  or  from  highways  by  either  natural  or  artificial  barriers.  Where  such  bar- 
riers do  not  exist,  the  distances  should  be  doubled. 


Important  Notice 

An  artificial  barrier  shall  be  held  to  mean  an  artificial  mound  or 
properly  revetted  wall  of  earth  of  a  minimum  thickness  of  not  less  than 
3  feet  of  such  height  that  any  straight  line  drawn  from  the  top  of 
any  side  wall  of  the  building  containing  explosives  to  any  part  of  the 


FEDERAL  REGULATION  OF  EXPLOSIVES  461 

building  to  be  protected  will  pass  through  such  intervening  artificial 
barrier,  and  any  straight  line  drawn  from  the  top  of  any  side  wall  of 
the  building  containing  explosives  to  any  point  12  feet  above  the  center 
of  a  railway  will  pass  through  such  intervening  artificial  barrier.  The 
foregoing  definition  as  to  height  shall  also  apply  to  any  natural  barrier. 
Far  quantities  not  given  in  the  above  table  use  distances  shown  for 
nearest  tabulated  quantity;  or  if  extreme  accuracy  is  desired,  take  pro- 
portionate figures. 


462         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  MODERN  APPLICATION  OF  TRANSMISSION, 
ELEVATOR  AND  CONVEYOR  BELTING 

Address  by  J.  W.  FERGUSON,  St.  Louis,  Mo. 

From  the  very  beginning  of  the  manufacturing  era,  belting 
has  played  a  most  important  part  in  the  world's  production. 
In  the  same  manner  as  man  first  clothed  himself  with  the  skins 
of  animals,  it  was  natural  that  the  tanned  hides  of  cattle  should 
be  used  for  belting  and  leather  belting  was  universally  em- 
ployed for  the  transmission  of  power  during  the  initial  devel- 
opment of  manufacturing. 

The  large  production  of  cotton  in  the  United  States  and  suc- 
cessive improvements  in  carding,  spinning  and  weaving  this 
into  fabric  led  to  experiments  with  belts  made  up  of  a  number 
of  plies  of  such  cotton  fabric,  which  were  stitched  together 
lengthwise  of  the  belt  in  a  very  similar  manner  to  the  cotton 
stitched  belting  of  today. 

About  the  middle  of  the  last  century,  the  discovery  of  the 
vulcanizing  process  by  Charles  Goodyear  made  the  use  of 
rubber  commercially  possible  and  rubber  belts  began  to  be  used 
in  manufacturing  and  mining  work. 

The  early  rubber  belts  were  of  low  grade,  as  would  be  ex- 
pected, the  art  of  manufacture  then  being  in  its  infancy.  Such 
foelts  were  built  up  from  cotton  duck,  spread  with  rubber  com- 
pound and  generally  stitched  together,  as  there  was  little  adhe- 
sion between  the  plies  of  fabric.  A  rubber  cover  was  then 
applied,  completely  covering  the  belt  body,  with  the  end  in 
view  of  preventing  moisture  from  penetrating  to  the  duck, 
causing  mildew  and  rot. 

The  modern  result  is  the  friction  surface  rubber  belt,  in 
which  is  overcome  tHe  inherent  defects  of  the  earlier  construc- 
tions, with  the  added  advantages  of  absolute  water-proofness, 
greater  flexibility  and  a  belt  surface  which  gives  maximum 
f rictional  resistance  on  the  pulley  face. 

Briefly  describing  the  manufacture,  the  cotton  duck  is  thor- 
oughly impregnated  with  high-grade  rubber,  which  is  forced 
through  and  through  the  fabric,  with  the  result  that  each  cotton 


THE  MODERN  APPLICATION  OF  TRANSMISSION          463 

strand  is  coated  with  rubber  so  that  the  duck  becomes  abso- 
lutely water-proof. 

It  is  worthy  of  note  in  this  connection  that  thorough  impreg- 
nation of  the  duck  can  be  obtained  only  by  the  use  of  high- 
grade  rubber  compounds,  otherwise  the  permeation  of  the 
rubber  is  uneven  and  does  not  result  in  completely  insulating 
the  fabric  against  moisture,  which  is  especially  necessary  for 
mining  work. 

The  belt  is  then  built  up  in  the  width  and  ply  required  and 
cured  under  heavy  hydraulic  pressure,  while  it  is  at  the  same 
time  stretched.  Since  it  is  made  of  water-proof  material,  there 
is  no  outside  rubber  cover  applied  as  in  the  earlier  construction.. 
There  is  a  coating  of  rubber  on  the  belt  face,  it  is  true,  but  this 
is  only  the  rubber  which  has  been  forced  through  the  duck  in 
the  frictioning  process  and  this  frictioned  belt  surface  clings 
to  the  pulley  face  with  an  elastic  grip. 

No  stitching  is  used  to  hold  the  plies  together,  for,  after 
curing  the  elastic  bond  of  what  is  in  effect  thousands  of  rubber 
rivets,  passing  through  the  interstices  of  the  duck,  prevents  ply 
separation  of  a  properly  applied  belt  and  at  the  same  time 
permits  movement  of  the  plies,  relative  to  each  other,  which  is 
demanded  by  the  stretching  of  the  outer  plies  and  the  com- 
pression of  the  inner  ones  in  passing  around  the  pulleys. 

Belts  derive  their  power  to  transmit  motion  from  the  fric- 
tional  resistance  between  the  surface  of  the  belt  and  the  pulley 
and  from  nothing  else.  Hence,  the  very  high  coefficient  of 
friction  of  this  type  belt  on  the  pulley  is  of  great  importance. 
This  quality,  in  connection  with  absolute  uniformity  of  con- 
struction and  strength  throughout  the  belt,  also  immunity  to 
moisture  and  temperature  changes,  makes  the  field  for  high- 
grade  friction  surface  belting  practically  universal. 

Expense  of  Belting 

Though  the  belting  account  represents  a  very  considerable 
percentage  of  the  operating  expense  in  manufacturing  plants 
of  all  kinds,  it  is  unfortunately  true  that  relatively  little  atten- 
tion has  been  given  to  this  important  subject  by  the  users. 

In  figuring  the  total  expense  of  belting  and  the  manufac- 
turing cost  chargeable  to  this  account,  by  far  the  largest  item 
is  the  time  lost  while  belts  are  being  replaced  and  repaired.  In 


464         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

other  words,  low  first  cost  does  not  mean  low  final  or  unit  cost 
and  proper  application  of  belting  is  most  important  if  shut- 
downs and  delays  are  to  be  avoided. 

When  a  belt  is  strained  into  place  over  two  pulleys  it  has  a 
certain  initial  tension  which  with  the  pulleys  at  rest  is  uniform 
throughout  the  belt.  At  the  moment  the  driving  pulley  begins 
to  move  the  belt  is  stretched  on  the  driving  side  and  the  tension 
increased,  while  the  other  side  is  shortened  and  its  tension 
decreased.  This  process  goes  on  until  the  force  tending  to 
rotate  the  driven  pulley  is  sufficient  to  overcome  its  resistance 
to  motion.  Subject  to  the  limiting  value  of  the  ratio  of  tensions, 
the  driven  pulley  rotates  and  in  the  case  of  a  uniform  load  the 
condition  of  the  belt  is  permanent  from  this  moment.  The 
effective  or  driving  force  accomplishing  this  result  is  the  differ- 
ence between  the  tensions  in  the  tight  and  loose  sides. 

All  formulas  for  horsepower  which  belting  will  transmit  are 
based  on  this  condition  and  take  into  consideration  the  tension 
in  the  driving  side,  the  coefficient  of  friction  between  the  belt 
and  the  pulley,  and  the  tensile  strength  of  the  belt,  which  must 
be  such  that  the  working  tension  is  only  a  small  fraction  of  the 
ultimate  tensile  strength. 

There  is  a  confusing  abundance  of  formulas  and  charts  cov- 
ering transmission  belting  from  which  widely  different  results 
can  be  obtained,  but  the  main  principles  are  now  quite  well 
established,  largely  from  the  experiments  of  Lewis,  Taylor  and 
Barth.  These  experiments  upset  previously  accepted  ideas  and 
went  to  show  that  various  conditions  which  had  been  supposed 
to  remain  constant  were  really  variable  and  changed  with  belt 
speed,  slip,  etc. 

While  it  is  impossible  to  make  an  exact  mathematical  analysis 
of  the  action  of  belting,  due  to  the  variables  which  enter  into 
consideration,  for  all  practical  purposes,  the  subject  has  been 
thoroughly  worked  out. 

Selecting  the  Belt 

Perhaps  the  most  important  factor  in  determining  the  right 
belt  for  a  drive  is  the  required  horsepower.  It  is  necessary  to 
figure  on  the  maximum  power  which  the  belt  will  have  to 
handle.  This  is  a  very  different  amount  than  the  rated  horse- 
power of  an  engine,  motor  or  machine.  The  starting  load  on  a 


THE  MODERN  APPLICATION  OF  TRANSMISSION  465 

motor  is  often  100  per  cent,  in  excess  of  its  rating.  Induction 
motors  will  carry  50  per  cent,  overload  for  hours  without  over- 
heating. A  line  shaft  mounted  in  babbitted  bearings  has  a 
starting  load  which  is  several  times  its  normal  running  load. 
Ball  mills  and  all  types  of  reduction  mills  in  which  a  heavy 
weight  must  be  started  from  rest  into  motion  are  also  examples 
of  heavy  starting  loads. 

An  air  compressor  drive  illustrates  a  variable  load.  The 
power  required  increases  at  the  end  of  the  compression  stroke. 
The  maximum  power  for  which  a  compressor  must  be  belted 
is  about  50  per  cent,  more  than  the  average  load. 

In  the  Joplin  mining  district  recently  a  series  of  electric 
power  tests  were  made  on  the  various  concentrating  mill 
drives — crushers,  rolls,  jigs,  elevators,  etc.  In  each  case  a 
motor  was  belted  to  the  driven  pulley  and  a  recording  watt 
meter  used  to  measure  the  power  consumption  in  a  ten-hour 
run.  The  results  showed  maximum  horsepowers  in  some  cases 
as  high  as  150  per  cent,  in  excess  of  the  average  load  and  for 
the  entire  mill  the  maximum  load  was  20  per  cent,  in  excess  of 
the  average. 

The  Hidden  Horsepower 

These  are  just  a  few  examples  of  the  hidden  horsepower 
requirement  which  must  always  be  considered  in  applying  the 
proper  belt.  The  size  and  speed  of  the  pulleys  is  the  other 
important  factor.  Great  care  must  be  taken  not  to  use  too 
heavy  a  belt  on  a  small  pulley.  If  the  power  cannot  be  devel- 
oped with  a  lighter  belt,  a  wider  pulley  should  be  installed  so 
as  to  use  a  belt  of  greater  width.  Generally  speaking,  the 
slower  the  belt  speed  the  heavier  the  belt  which  can  safely  be 
used  over  a  given  size  of  pulley. 

While  the  horsepower  that  a  belt  will  transmit  is  directly 
proportional  to  its  speed,  because  of  the  action  of  centrifugal 
force  at  high  speeds,  which  adds  to  the  tension  and  decreases 
the  contact  on  the  pulley,  a  travel  of  4,000  feet  per  minute  is 
about  the  limit  for  thoroughly  satisfactory  service. 

Manufacturers  of  machinery,  motors,  etc.,  have  always 
shown  an  inclination  to  equip  their  machines  with  pulleys  that 
are  too  narrow  in  face  and  too  small  in  diameter  to  allow 
efficient  service  from  belting.  This  tendency  has  been  so 


466         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

marked  that  at  the  International  Belting  Conference,  held  at 
Chicago  in  September,  1,000  delegates  from  36  States  unani- 
mously deplored  this  condition.  It  was  decided  to  approach 
the  manufacturers  through  their  various  trade  organizations, 
in  an  endeavor  to  make  them  see  the  wisdom  of  adopting  larger 
pulley  sizes. 

For  the  conveying  and  elevating  of  materials  in  mining  work 
rubber  belting  is  almost  universally  used,  as  it  has  conclusively 
demonstrated  its  economy.  Since  belting  is  the  largest  item  of 
expense  in  the  operation  of  such  installations,  particular  atten- 
tion must  be  given  to  this. 

Conveyor  Belts 

Briefly  described,  conveyor  belting  consists  of  two  parts — a 
rubber  cover,  the  purpose  of  which  is  to  resist  the  abrasive 
action  of  the  load,  and  a  body  built  up  of  frictioned  fabric, 
which  functions  in  a  similar  manner  to  that  of  a  transmission 
belt,  and  has  the  necessary  strength  to  withstand  the  strains 
incident  to  conveying  the  load. 

The  ideal  sought  is  a  cover  stock  which  will  last  as  long  as 
the  body  of  the  belt;  in  other  words,  a  balanced  construction 
resulting  in  maximum  efficiency  and  lowest  possible  final  cost.. 

The  capacity  of  a  belt  conveyor  in  tons  per  hour  depends  in 
general  on  the  width  of  the  belt,  the  speed  at  which  it  runs, 
the  weight  per  cubic  foot  of  the  material  handled  and  the 
degree  of  uniformity  of  this  material.  Inclines  of  not  to  exceed 
20  degrees  will  not  reduce  the  belt  capacity  or  cause  extra  wear 
on  the  cover  due  to  shifting  of  the  load.  The  angle  of  incline 
should  be  about  10  degrees  less  than  the  angle  of  repose  of  the 
material  on  the  belt. 

Belt  speeds  vary  from  150  feet  per  minute  to  a  maximum 
of  about  600  feet,  the  faster  belt  speeds  being  used  with  wide 
belts  and  it  is  an  axiom  of  belt  conveyor  practice  that  the  belt 
should  not  be  run  faster  than  required  for  the  capacity  to  be 
handled.  It  follows,  then,  that  conveyor  belts  should  be  fully 
loaded  at  all  times,  and  this  is  necessary  for  the  lowest  possible 
cost  per  ton  handled.  It  is  the  amount  of  material  which 
actually  touches  the  belt  which  causes  wear  and  the  largest 
cross  section  of  material  presents,  relatively,  the  smallest  sur- 
face to  the  belt. 


THE  MODERN  APPLICATION  OF  TRANSMISSION  467 

Wear  of  conveyor  belts  is  largely  due  to  impact  and  slipping 
of  the  material  as  it  is  picked  up  at  the  loading  point.  It  is, 
then,  very  important  in  laying  out  a  conveyor  system  to  provide 
for  proper  loading.  There  should  be  one  loading  point,  where 
the  material  is  fed  to  the  belt  by  a  loading  chute,  so  designed 
as  to  insure  a  steady  flow,  in  the  same  direction  and  at  the  same 
speed  that  the  belt  travels.  Where  there  is  considerable  fine 
material  mixed  with  large  lumps,  it  is  desirable  to  place  a 
-grating  in  the  bottom  of  the  loading  chute  so  that  the  fines  flow 
through  to  the  belt  and  form  a  cushion  for  the  heavy  lumps. 

Next  to  improper  loading,  the  most  common  fault  found  is 
edge  wear,  due  to  failure  to  keep  the  conveyor  equipment  prop- 
erly lined  up.  Care  in  keeping  the  belt  centered  will  pay  big 
dividends  in  increased  tonnage  handled. 

Elevator  belts  in  mining  work  are  subjected  to  extremely 
severe  wear  and  are  perhaps  the  most  troublesome  item  in  the 
belting  line  for  the  mill  superintendent. 

Bucket  Elevators 

The  capacity  of  bucket  elevators  is,  of  course,  determined  by 
the  size  of  buckets,  the  loading  arrangement  and  the  belt  speed. 
A  number  of  factors  must  be  weighed  against  each  other  in 
determining  what  is  best  for  the  particular  installation. 

The  number  of  plies  must  be  sufficient  to  carry  the  load  with- 
out excessive  stretch.  The  belt  is  subjected  to  destructive  wear, 
especially  on  the  pulley  side,  owing  to  particles  which  are  not 
discharged  clear  and  fall  back  to  be  ground  between  the  belt 
and  the  pulleys.  This  leads  some  users  to  order  elevator  belts 
several  plies  heavier  than  otherwise  necessary  to  allow  for  such 
wear  without  weakening  the  belt  beyond  the  required  limit  of 
strength.  Care  must  be  taken  that  too  heavy  a  belt  is  not  used 
so  that  the  internal  friction  set  up  in  passing  over  the  pulleys 
will  shorten  its  life  by  ply  separation. 

The  buckets  being  rigidly  bolted  to  the  belt,  it  is  apparent 
that  in  passing  over  the  pulleys  a  severe  strain  is  placed  on  the 
belt,  tending  to  tear  out  the  bolts.  A  flexible  construction  is 
therefore  necessary.  It  is  advisable  to  use  strips  of  old  belt 
about  1%  inches  wide  and  of  a  length  equal  to  the  depth  of  the 
bucket,  between  the  bucket  and  the  belt.  These  strips  allow 
water  to  flow  downward  between  the  belt  and  the  buckets, 


468         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

washing  away  much  of  the  grit  which  would  otherwise  lodge 
there,  and  reducing  the  cutting  action  of  the  back  edge  of  the 
bucket  as  it  is  thrown  against  the  belt  in  passing  over  the  head 
pulley. 

By  punching  holes  through  the  belt  for  the  bolts  the  tensile 
strength  is  of  course  materially  reduced.  An  ingenious  method 
of  avoiding  this  decrease  in  strength  is  used  by  one  of  the  large 
mining  companies  that  is  worthy  of  universal  adoption.  A 
punch  was  made  from  a  piece  of  bar  steel  a  little  larger  in 
diameter  than  the  elevator  bolts  used.  One  end  was  tapered 
down  to  a  sharp  point,  while  the  other  end  was  drilled  and 
tapped  to  suit  the  thread  on  the  bolts.  A  bolt  is  screwed  into 
the  threaded  end  of  the  punch,  which  is  then  driven  through  the 
belt  and  the  punch  unscrewed  from  the  bolt.  In  this  way  none 
of  the  warp  threads  of  the  fabric  are  cut,  as  they  are  simply 
pushed  aside  to  make  room  for  the  bolts  and  the  strength  of  the 
belt  is  unimpaired. 

Speed  of  Elevators 

The  speed  of  elevator  belts  runs  from  200  to  500  feet  per 
minute,  as  required  for  proper  discharge  of  the  material.  As 
low  a  speed  as  possible  should  be  used,  since  high-speed  elevator 
belts  may  be  seriously  damaged  by  buckets  catching  when  pass- 
ing through  the  boot. 

For  elevating  materials  not  particularly  abrasive,  either  wet 
or  dry,  belts  of  the  friction  surface  type  are  found  to  give  the 
best  records.  Where  the  material  is  very  abrasive  a  tough 
rubber  cover  is  used,  the  object  being  to  produce  a  balanced 
construction  in  which  the  cover  withstands  the  abrasive  action, 
so  as  to  allow  the  body  of  the  belt  to  wear  out  naturally. 

In  either  type  of  belt  the  body  should  be  of  strong,  heavy 
duck  and  so  constructed  that  it  is  as  flexible  as  possible.  This 
is  accomplished  by  placing  a  skim  coat  of  rubber  between  each 
of  the  plies,  in  addition  to  the  rubber  forced  through  the  duck 
in  the  f  rictioning  process.  An  examination  of  worn-out  ele- 
vator belts  at  any  mill  will  clearly  show  the  necessity  for  this 
extra  flexibility.  It  will  be  found  that  belts  in  which  this  fea- 
ture has  not  been  incorporated  have  largely  failed  by  cracking 
across  the  face  on  the  bucket  side  and  near  the  back  edge  of  the 
buckets.  This  will  be  true  even  though  the  pulleys  are  of  fair 


THE  MODERN  APPLICATION  OF  TRANSMISSION  469 

size.  Other  sections  will  be  capable  of  much  more  service ;  so 
that  it  is  apparent  the  overcoming  of  this  inherent  defect  must 
result  in  considerably  lowered  tonnage  costs,  as  has  been 
demonstrated  where  the  flexible  type  belt  has  been  used. 

All  belting  of  the  better  grades  has  merit  and  every  belt  in- 
stallation has  an  individuality  all  its  own.  The  problem  of 
getting  efficient  service  from  belting  is  strictly  one  of  proper 
application,  which  involves  analysis  of  maximum  load,  speed, 
pulley  conditions,  etc.  The  main  reason  for  poor  service  has 
been  that  users  have  been  disposed  to  regard  belting  as  a 
standard  commodity,  which  can  be  bought  like  lumber,  but  the 
best  belt  ever  made  will  not  give  satisfactory  service  unless  it 
is  suited  to  the  work. 

The  proper  application  of  belting  really  amounts  to  about 
10  per  cent,  of  scientific  knowledge  and  fully  90  per  cent,  of 
analysis  and  good  judgment  based  upon  experience. 

The  progressive  manufacturer  of  belting  is  fully  conversant 
with  what  his  product  will  do  and  really  owes  a  service  to  his 
customers  in  aiding  them  to  obtain  the  inbuilt  service  by  assist- 
ing in  proper  application. 

A  Technical  Study 

One  large  manufacturer  has  gone  so  far  along  this  line  as  to 
provide  a  corps  of  engineers,  trained  in  the  application  of  belt- 
ing, who  are  available  to  provide  this  specialized  service,  in 
analyzing  the  belting  conditions  of  complete  plants.  It  is  the 
purpose  of  these  engineers  to  study  the  conditions  of  each  belt, 
so  as  to  specify  a  belt  which  will  operate  most  efficiently  and 
at  the  lowest  possible  final  cost. 

With  the  co-operation  of  the  mechanical  men  of  the  plant, 
the  analyst  is  able  to  work  out  the  difficult  application  problems 
and  greatly  improve  conditions. 

The  complete  data  covering  each  belt  is  incorporated  in  a 
report  with  recommendations  of  what  should  be  used  for  the 
best  service.  One  or  more  copies  as  may  be  required  are  fur- 
nished the  plant  officials,  who  look  after  the  belting  so  that  they 
have  the  full  information. 

An  incidental  advantage  of  such  an  intensive  study  in  any 
plant  is  the  opportunity  to  standardize  sizes  of  belting,  thereby 
cutting  down  the  investment  in  stock. 


470         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Many  plants  have  adopted  this  method  of  cutting  down  their 
belting  costs  and  are  following  the  recommendations  of  these 
engineers  because  they  feel  that  from  their  experience  in  this 
work  their  recommendations  are  as  accurate  as  can  be  obtained 
and  the  results  have  been  quite  remarkable. 

Belt  Specialist  Valuable 

In  any  plant  which  uses  much  belting  there  should  be  one 
man  in  charge  of  belting,  pulleys  and  shafting^  particularly 
belting.  A  competent  man  on  this  work  will  save  several  times 
his  salary.  He  should  keep  careful  records  of  all  belting,  date 
of  application,  time  lost  on  machines  because  of  repairs,  etc., 
so  that  when  a  belt  is  finally  removed  the  unit  cost  of  service 
can  be  ascertained  and  by  comparison  with  other  records  the 
belt  giving  the  most  efficient  service  adopted  as  standard.  The 
most  practical  way  of  keeping  such  records  is  to  have  a  card 
for  each  belt  in  the  plant  on  which  one  horizontal  line  provides 
the  complete  information  on  each  belt  used,  affording  a  means 
of  ready  comparison  of  records.  The  cards  should  be  of  a  size 
to  fit  standard  files,  and  several  manufacturers  are  furnishing 
these  to  their  customers.  When  such  a  system  is  in  use  the 
true  value  or  final  cost  cf  belting  of  different  types  is  definitely 
proven. 

The  subject  has  been  so  large  for  the  time  available  that  this 
paper  may  have  been  too  general.  It  will,  however,  have 
accomplished  its  purpose  if  it  has  shown  you  some  of  the 
problems  and  suggested  a  remedy. 


LANDS  AND  MINERAL  RESOURCES  OF  MINNESOTA        471 


LANDS  AND  MINERAL  RESOURCES  OF  THE  STATE  OF 

MINNESOTA 

Address  by  F.  A.  WILDES,  Superintendent  of  State  Mines 

The  Federal  Government  gave  the  State  of  Minnesota,  with- 
out reservation  and  with  few  conditions,  some  8,000,000  acres 
of  land.  Out  of  the  sale  and  disposal  of  some  6,000,000  acres 
permanent  funds  amounting  to  over  $38,000,000  have  accumu- 
lated, with  a  promise  that  the  remaining  acres  will  more  than 
double  this  sum  within  the  coming  generation. 

The  administration  of  this  vast  domain  is  given  to  the 
State  Auditor  with  his  other  numerous  duties.  The  incum- 
bent is  the  Hon.  J.  A.  0.  Preus.  It  is  his  duty  to  see  that  all 
lands  to  which  the  State  is  entitled  by  the  several  acts  of  Con- 
gress are  selected  and  certified  to  the  State,  to  see  that  no 
trespass  is  committed  against  these  lands,  to  appraise  and  sell 
only  such  land  as  is  fit  for  agriculture  and  to  lease  for  minerals 
and  inspect  operations  under  such  leases,  to  estimate,  appraise 
and  sell  timber  and  to  see  that  the  proceeds  are  so  invested  as 
to  yield  a  reasonable  income. 

A  brief  history  of  how  the  State  became  possessed  of  this 
domain  and  the  method  of  handling  the  same  may  be  of 
interest. 

The  Organic  Act  of  Minnesota  passed  March  3,  1849,  by 
Congress  reserved  for  application  to  school  purposes  Sections 
16  and  36  in  each  township  within  the  boundaries  of  the  new 
Territory.  When  opened  for  sale,  many  of  these  sections  were 
found  to  have  been  conveyed  by  the  Government,  occupied  by 
settlers  or  otherwise  disposed  of.  The  new  Territory  and  the 
subsequent  State  were  permitted  to  select  lands  in  other  parts 
of  the  township  in  lieu  of  such  lands.  In  all,  the  State  received 
from  this  source  approximately  3,000,000  acres,  of  which  there 
are  unsold  some  600,000  acres.  From  the  sale  of  the  land,  and 
none  can  be  sold  for  less  than  $5  per  acre,  over  $15,000,000 
has  been  received.  For  the  sale  of  timber  over  $7,600,000  has 
been  received.  Minnesota  not  being  a  mineral  State  at  that 
time,  the  Federal  Government  did  not  reserve  minerals.  Some 


472         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  the  most  valuable  iron  mines  in  the  world  have  been  found 
on  these  lands.  The  income  from  the  minerals  on  school  fund 
lands  to  date  is  upward  of  $6,500,000,  with  a  known  tonnage 
of  iron  ore  remaining  under  lease  that  will  add  to  this  more 
than  $30,000,000. 

The  act  authorizing  the  Territory  to  form  a  State  govern- 
ment, passed  February  26,  1857,  confirmed  the  school  land 
grant,  and  offered  72  sections  of  land  for  the  support  of  a 
State  university,  10  sections  for  the  purpose  of  completing 
certain  public  buildings  and  the  erection  of  others,  and  6  sec- 
tions for  each  salt  spring,  not  exceeding  a  total  of  12  springs. 

By  an  act  of  March,  1860,  all  swamp  or  overflowed  lands 
within  the  State  were  granted  to  the  State  by  Congress.  Under 
this  grant  the  State  has  received  patents  for  4,700,000  acres. 
From  the  sale  of  a  portion  $6,300,000  has  been  received,  with 
fully  $7,500,000  still  due  under  mineral  contracts. 

Great  Educational  Fund 

The  University  Fund  has  received  from  the  sale  of  a  part  of 
the  lands  $1,800,000.  There  still  remains  much  land,  timber 
and  iron  ore  undisposed  of.  The  tonnage  of  iron  ore  under 
lease  on  university  land  is  sufficient  to  add  $1,750,000  in 
royalties. 

All  these  funds  are  kept  intact  and  only  the  interest  is  spent. 
It  will  be  seen  that  the  permanent  funds  from  this  land  grant 
have,  at  present,  over  $38,000,000,  which  will  be  more  than 
doubled  within  the  next  25  or  30  years  from  leased  iron  mines 
alone,  to  say  nothing  of  the  possibilities  on  unexplored  lands 
that  are  known  to  contain  some  deposits  of  ore  of  unknown 
tonnage  and  grade.  The  timber  and  unsold  surface  rights  will 
add  their  share  also. 

Minnesota  is  one  of  the  few  States  that  has  practiced  con- 
servation of  her  public-owned  lands.  No  land  is  sold  except 
at  public  sale  after  appraisal,  and  none  can  be  sold  for  less 
than  the  minimum  price  of  $5  per  acre.  The  pine  and  cer- 
tain other  timber  are  sold  separately  and  the  minerals  are  all 
reserved  by  the  State.  Much  timber  was  lost  to  the  State  in 
the  early  days  because  of  the  failure  of  the  Legislature  to 
appropriate  sufficient  funds  for  looking  after  the  sale  and  cut- 
ting of  the  same. 


LANDS  AND  MINERAL  RESOURCES  OF  MINNESOTA       473 

Between  1889  and  1907  more  than  800  mineral  leases  were 
taken  out  on  State  lands  for  the  mining  of  iron  ore.  Of  these 
some  85  are  still  in  force,  having  an  estimated  tonnage  of  about 
168,000,000  tons  of  merchantable  ore  and  a  prospective  ton- 
nage of  lower  grade  ore  material  of  an  additional  100,000,000 
tons.  All  this  is  under  lease  to  be  mined  within  20  or  30  years 
at  most,  and  the  above  funds  will  receive  25  cents  upon  each 
ton.  But  this  is  not  all.  Since  the  mineral  lease  law  was  sus- 
pended in  1907,  exploration  work  on  private  fee  lands  has 
shown  that  State  lands  not  under  lease  are  within  the  mineral 
zones.  These  lands  will  add  materially  to  the  present  known 
tonnage  as  well  as  to  the  income,  for  it  is  generally  conceded 
that  the  royalty  received  by  the  State  under  its  present  leases 
is  too  small.  Iron  ore  is  the  only  mineral  mined  in  Minnesota 
at  present,  though  there  is  evidence  of  other  minerals,  such  as 
copper,  gold,  etc. 

Leasing  River  Beds 

The  State  also  claims  the  title  to  all  soil  under  public 
meandered  rivers  and  lakes.  Several  rivers  and  lakes  on  the 
iron  ranges  are  known  to  contain  iron  ore  in  their  beds.  One 
of  these  lake  beds  has  been  leased  by  the  State  at  the  rate  of 
50  cents  per  ton  royalty.  From  this  one  lease  alone  the  State 
will  receive  a  million  and  a  half  dollars. 

The  shipment  from  State-owned  mines,  of  which  there  are 
more  than  a  score,  run  from  three  to  four  and  three-quarters 
million  tons  annually.  All  operations  under  the  leases  are 
checked  by  a  corps  of  mining  engineers  and  inspectors  to  see 
that  all  possible  areas  and  grades  of  ore  are  taken  out  and 
credited  to  the  State.  The  lease  runs  for  50  years,  has  a 
minimum  annual  output  of  5,000  tons  and  a  reservation  of 
royalty  of  25  cents  per  ton.  The  lessees  covenant  to  mine  the 
ore  in  accordance  with  the  requirements  of  good  mining 
engineering,  to  refrain  from  the  commission  of  waste,  and  to 
pay  all  taxes. 


474         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


ALASKA,  A  NATIONAL  OPPORTUNITY 

Address  by  JOHN  A.  DAVIS,  Governor  Alaska  Chapter  American  Mining 
Congress,  Fairbanks,  Alaska 

To  many  persons  the  word  "Alaska"  connotes  a  small  area 
tucked  away  in  the  lower  left-hand  corner  of  a  map  of  "The 
United  States  and  Our  Island  Possessions/'  an  area  which  they 
visualize  as  a  land  of  intense  cold,  of  ice,  snow  and  glaciers — 
"Seward's  Icebox" — and  about  which  they  conjure  up  a  picture 
of  an  Eskimo  sitting  on  a  cake  of  ice  and  smiling  at  grief ;  or  a 
picture  of  gambling  and  vice  rampant;  or  of  trials  and  hard- 
ships to  be  endured  for  the  winning  of  fabulous  riches ;  or  of 
virgin  gold  to  be  had  for  the  asking.  To  those  who  know  and 
love  her  as  she  is  today,  however,  she  speaks  a  different  lan- 
guage— a  various  language.  She  tells  of  vast  areas  of  forest 
and  of  potential  farms ;  of  magnificent  scenery ;  of  warm  and 
glorious  summers ;  of  flowers  and  shrubbery  run  riot ;  of  celery, 
lettuce,  radishes,  beets,  potatoes,  tomatoes  and  cucumbers  to  be 
excelled  nowhere  else  on  earth;  of  law  and  order,  patriotism 
and  thrift,  and  of  almost  fabulous  riches  of  mineral  wealth — 
no  longer  to  be  had  by  the  haphazard  seeker  with  his  shovel 
and  gold  pan,  it  is  true,  but  offering  stupendous  opportunities 
for  systematic  mining  with  modern,  up-to-date  equipment. 

A  Vast  Empire 

Perhaps  no  greater  slander  can  be  perpetrated  by  cartog- 
raphers upon  the  fair  name  of  Alaska  than  the  customary 
habit  of  depicting  the  Territory  upon  a  greatly  reduced  scale, 
tucked  away  in  some  convenient  corner  of  the  map  of  the 
United  States.  Such  a  course  must  inevitably  portray  a  grossly 
inaccurate  impression  of  the  size  of  the  country.  Alaska  is  not 
the  size  of  Rhode  Island.  In  its  area  of  590,000  square  miles 
you  could  lose,  not  only  Rhode  Island,  but  the  whole  Thirteen 
Original  States  as  well,  with  Maine,  Vermont,  West  Virginia, 
Florida,  Alabama,  Tennessee  and  Kentucky  thrown  in  for  good 
measure.  Few  persons  realize  that  if  Alaska  were  superim- 
posed upon  a  map  of  the  United  States  with  its  southeastern 


ALASKA,  A  NATIONAL  OPPORTUNITY  475 

point  at  Savannah,  Ga.,  the  westernmost  Aleutian  Island  would 
fall  upon  Los  Angeles,  Cal.,  and  the  main  bulk  of  the  Territory 
would  entirely  cover  Wisconsin,  Minnesota,  Illinois,  Iowa  and 
the  greater  part  of  Missouri,  Kansas  and  Nebraska.  Alaska 
contains  156,000  square  miles  of  timber  land,  one-fourth  of 
which  is  covered  with  merchantable  timber,  while  that  of  the 
remainder  will  make  the  finest  grade  of  paper  pulp.  It  has 
100,000  square  miles  of  agricultural  land,  equal  to  that  of 
Pennsylvania,  Maryland,  Delaware,  New  Jersey,  Connecticut, 
Massachusetts  and  New  Hampshire.  And  Alaska  has  a  coast 
line  of  26,000  miles  in  length ;  greater  than  the  circumference 
of  the  earth.  In  the  bays  and  inlets  of  this  coast  is  centered  a 
fishing  industry  that  in  one  season,  1918,  packed  $50,000,000 
worth  of  salmon.  The  unexplored  and  undeveloped  regions  of 
the  interior  abound  in  fur-bearing  animals,  the  source  of 
another  great  industry.  Alaska  is  a  vast  empire.  Its  very 
name,  in  the  Indian  tongue,  from  which  it  was  derived,  means 
"The  Great  Country." 

Scenic  Beauty 

Even  if  time  would  permit  an  attempt,  the  richest  and  most 
colorful  words  in  the  language  are  utterly  inadequate  to 
describe  the  scenery  of  Alaska.  Mr.  E.  R.  Harrison,  who  saw 
the  coast  of  Alaska  from  his  private  yacht,  exclaims :  "There 
are  glaciers  and  fiords  elsewhere,  but  nowhere  on  earth  is  there 
such  an  abundance  and  magnificence  of  mountain,  fiord  and 
glacier  scenery."  The  Malaspina  glacier,  one  of  the  hundreds 
of  glaciers  in  Alaska,  covers  an  area  one-tenth  the  entire  size 
of  Switzerland.  Norwegians  and  persons  who  have  traveled  in 
that  country  are  outspoken  in  saying  that  the  Inland  Passage 
among  the  islands  of  Southeastern  Alaska  far  outstrips  in 
beauty  the  famous  fiords  of  Norway.  Addison  Powell,  while  a 
member  of  the  United  States  Geological  Survey,  writes :  "The 
scenery  of  Alaska  is  finer  than  Switzerland,  the  Austrian  Tyrol, 
Venice,  Vesuvius  and  the  Bay  of  Naples."  This  is  literally  true 
and  even  this  comparison  with  the  wonder  spots  of  the  world 
fails  to  do  justice  to  Alaska.  Mount  McKinley,  or,  as  the 
natives  call  it,  Denali,  "the  Most  High,"  a  mountain  superim- 
posed on  a  perpetually  snow-capped  mountain  range,  domi- 
nates an  Alpine  landscape  for  hundreds  of  miles.  Vesuvius 


476         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  Yellowstone  Park  suffer  by  comparison  with  Mt.  Katmai 
and  the  "Valley  of  Ten  Thousand  Smokes."  And  at  sunrise 
and  sunset  in  the  innumerable  bays  and  inlets  of  the  Alaskan 
coast  there  are  beauties  in  coloring  of  sky,  land  and  sea  that 
even  Venice  or  the  Bay  of  Naples  cannot  duplicate.  Well  can 
Mr.  Harrison  say :  "There  is  one  word  of  advice  and  caution 
to  be  given  those  intending  to  visit  Alaska  for  pleasure,  for 
sight-seeing.  If  you  are  old,  go  by  all  means ;  but  if  you  are 
young,  wait.  The  scenery  of  Alaska  is  much  grander  than  any- 
thing else  of  the  kind  in  the  world,  and  it  is  not  well  to  dull 
one's  capacity  for  enjoyment  by  seeing  the  best  first." 

Alaskan  Climate 

To  describe  the  climate  of  Alaska  adequately  is  just  as  hard 
as  it  would  be  to  describe  the  varied  range  along  the  Atlantic 
Seaboard — for  instance,  from  Key  West  to  the  northernmost 
point  of  Maine,  with  the  added  difficulty  that  the  Alaskan 
climate  is  even  more  diverse.  The  entire  southern  and  south- 
eastern coast  is  profoundly  influenced  by  the  warmth  of  the 
Japan  current,  which  is  deflected  to  these  shores  by  the  long 
chain  of  Aleutian  Islands.  Even  in  midwinter  this  region  is 
frequently  warmer  than  Philadelphia  or  New  York.  North  of 
the  Alaska  Range,  which  encircles  the  Gulf  of  Alaska  and  shuts 
off  the  warmth  of  the  Japan  current,  the  winters  are  cold,  it  is 
true,  but  it  is  a  dry  cold  that  is  less  keenly  felt,  perhaps,  at  40 
degrees  below  zero  than  a  temperature  of  only  zero  in  the 
humid  atmosphere  of  Boston.  And  as  an  added  compensation 
the  summers  are  made  glorious  by  long  hours  of  sunlight.  For 
north  of  the  Arctic  Circle,  which  crosses  this  area,  is  the  land 
of  the  midnight  sun;  as  a  consequence  the  greater  part  of 
Alaska  is  bathed  in  20,  22  or  even  24  hours  of  continuous  sun- 
shine daily  throughout  the  summer  months.  Temperatures  of 
80  and  85  degrees  are  the  usual  thing  and  even  90  or  95  degrees 
are  not  uncommon. 

A  "Growing"  Climate 

To  the  long  hours  of  sunlight  may  be  directly  ascribed  the 
profusion  and  riotous  growth  of  vegetation  of  every  kind. 
Plants  and  flowers  do  not  have  "union  hours" ;  and  they  work 
"three  shifts"  under  the  compelling  rays  of  the  midnight  sun. 


ALASKA,  A  NATIONAL  OPPORTUNITY  477 

It  has  truly  been  said  that  a  list  of  wild  flowers  in  Alaska  would 
be  a  list  of  the  beauties  of  the  floral  kingdom.  Practically  all 
varieties  of  the  temperate  zone  are  to  be  found  here ;  many  of 
them,  like  the  wild  rose,  larger  and  more  fragrant  than  any 
place  else.  As  for  domesticated  flowers,  hedges  of  sweet  peas 
12  to  14  feet  high,  climbing  nasturtiums  that,  completely  cover 
Alaskan  homes,  pansies  larger  than  coffee  cups — these  facts  are 
as  difficult  to  believe  for  persons  who  have  never  been  to  Alaska 
as  were  the  facts  about  Santo  Domingo  that  Columbus  and  the 
early  explorers  brought  back  to  the  Old  World  centuries  ago. 

Agricultural  Advancement 

The  agricultural  possibilities  in  a  country  of  such  profuse 
vegetation  are  naturally  enormous.  Perhaps  the  greatest  de- 
velopment along  these  lines  has  been  made  in  the  broad  valleys 
of  the  Tanana  and  Yukon  Rivers.  The  variety  of  produce 
that  is  now  being  raised  there  is  amazing.  Celery,  which  re- 
quires a  cool  moist  soil  combined  with  rapid  growth,  attains  a 
crispness  and  delicacy  that  cannot  be  equaled,  and  it  is  to  be 
had  on  the  market  earlier  than  at  Boston.  Almost  every  family 
has  a  garden  supplying  lettuce,  radishes,  beets,  turnips  and 
carrots.  Cucumbers,  tomatoes  and  melons  are  grown  under 
glass  and  attain  a  size  and  a  flavor  that  are  almost  unbelievable. 
Alaska's  cauliflower  and  cabbage  are  famous.  The  Tanana 
Valley  has  been  self-supporting  in  the  matter  of  potatoes  ever 
since  the  discovery  that  the  sandy  soil  of  the  hillsides  is  more 
favorable  for  this  crop  than  the  rich  loamy  soil  of  the  river 
bottoms.  Oats,  rye,  barley  and  wheat  thrive  on  the  alluvial 
soil,  however,  and  prove  that  this  country  will  be  able  to  raise 
all  the  grain  it  may  need. 

Nineteenth  Century  Progress 

The  old  days  of  chaos  and  disorder  incident  to  the  rush  of 
gold-maddened  adventurers  to  this  land  of  fabulous  promise 
have  disappeared.  Gambling  and  the  dance  hall  have  long  since 
been  prohibited.  The  entire  Territory  has  been  "dry"  since 
January  1,  1918,  with  a  dryness  that  can  be  equaled  in  but  few 
States.  For  here  it  is  not  only  illegal  to  sell  intoxicating  bever- 
ages, but  it  is  a  Federal  offense  even  to  have  them  in  one's 
possession.  Schools,  churches  of  all  denominations,  banks, 


478         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

telephones,  electric  lights,  well-stocked  stores  are  to  be  found 
in  all  of  the  towns  in  the  Territory.  Law  and  order,  patriotism 
and  thrift  prevail.  Alaska  has  gone  over  the  top  in  every 
Liberty  Loan  and  Red  Cross  drive.  Not  only  has  she  gone  over 
the  top,  but  in  the  Third  Liberty  Loan  she  was  second  in  the 
United  States.  And  in  the  fourth  and  largest  Liberty  Loan,, 
although  her  apportionment  was  doubled  over  that  of  the  third, 
she  headed  all  of  the  States  by  subscribing  232.2  per  cent,  of 
her  quota.  The  nearest  approach  to  this  by  any  other  State 
was  185  per  cent. 

Alaska  divides  itself  naturally  into  four  mail  divisions — 
Southeastern,  Southwestern,  Seward  Peninsula  and  the  In- 
terior— corresponding  approximately  to  the  four  political  and 
judicial  divisions,  each  of  which  has  different  interests,  indus- 
tries, climate,  geography  and  resources.  The  interior  division, 
to  which  we  will  now  confine  our  attention,  includes  the  main 
heart  and  bulk  of  the  Territory  lying  north  and  east  of  the 
Alaska  Range,  containing  the  great  valleys  of  the  Yukon  and 
Tanana  Rivers. 

Railroad  Building 

The  characteristics  in  addition  to  that  of  climate,  which  most: 
distinguish  the  interior  from  the  other  districts,  are  remoteness, 
and  inaccessibility.  Southeastern  and  Southwestern  Alaska 
may  be  reached  by  deep  water  routes  throughout  the  entire- 
year,  and  even  though  Bering  Sea  is  icebound  in  winter, 
Seward  Peninsula  has  ocean  transportation  during  the  summer 
months  for  the  shipment  of  supplies  and  equipment.  But  sup- 
plies for  the  interior  must  be  shipped  either  by  sea  to  Skagway,. 
over  the  White  Pass  Railroad  to  the  headwaters  of  the  Yukon 
River,  and  then  on  steamboat  down  that  river  by  way  of 
Dawson,  or  else  by  sea  to  St.  Michael's  and  on  steamboats  up 
the  2,000  long  miles  against  the  current  of  the  Yukon.  The 
distance  and  rehandling  thus  entailed  make  for  a  very  high 
freight  rate,  with  a  consequent  increase  in  the  cost  of  supplies.. 
But  what  is  more  important,  these  routes  are  available  only 
during  the  summer  months  from  May  to  October,  when  the 
rivers  are  open,  so  that  supplies  must  be  purchased  at  least  a 
year  ahead  and  large  stocks  must  be  carried,  which  also  add 
materially  to  the  ultimate  cost.  The  Government,  however,  i& 


ALASKA,  A  NATIONAL  OPPORTUNITY  479 

building  a  railroad  from  Seward  to  Fairbanks,  which  will  give 
the  district  access  to  tidewater  throughout  the  year  and  do 
much  to  remove  the  disadvantage  of  inaccessibility. 

The  Gold  Industry 

The  principal  industry  of  the  interior  is  gold  placer  mining. 
The  deposits  near  Fairbanks,  at  the  head  of  navigation  on  the 
Tanana  River,  were  discovered  in  1902  and  since  that  time  have 
yielded  something  over  $70,000,000,  almost  ten  times  the  price 
paid  to  Russia  for  the  entire  Territory  of  Alaska.  The  Hot 
Springs-Rampart  district,  next  in  importance,  extends  from 
the  Tanana  to  the  Yukon  Rivers,  along  a  line  about  fifty  miles 
from  their  junction,  and  has  produced  nearly  $7,000,000.  The 
Tolovana  district,  lying  between  Fairbanks  and  the  Hot 
Springs-Rampart  region,  was  not  discovered  until  1914,  but  in 
the  five  years  of  its  history  has  yielded  over  $3,000,000.  The 
Bonnifield  and  Kantishna  districts  are  south  of  the  Tanana 
River  in  the  northern  foothills  of  the  Alaska  Range.  They  were 
discovered  in  1903,  but  their  development  has  been  severely 
handicapped  by  an  entire  absence  of  any  transportation  facili- 
ties worthy  of  name.  In  spite  of  this,  the  Kantishna  district 
lias  produced  nearly  $450,000  in  gold  and  the  Bonnifield 
approximately  $300,000. 

Although  there  had  been  considerable  prospecting  for  gold 
quartz  veins  in  the  Fairbanks  district  as  early  as  1905,  it  was 
not  until  three  years  later  that  discoveries  of  any  importance 
were  made.  Since  then  lode  mining  has  had  a  remarkable 
growth  when  due  consideration  is  given  to  the  difficulties 
-caused  by  the  winter  climate,  by  the  large  amount  of  frozen 
overburden  which  makes  the  sinking  of  shafts  to  solid  rock  an 
arduous  task,  by  the  high  cost  of  supplies  and  by  the  increasing 
scarcity  of  fuel.  The  production  of  gold  from  this  source 
amounts  to  one  and  one-quarter  million  dollars,  but  in  addition 
the  district  has  produced  antimony  ore  to  the  extent  of 
$200,000  and  tungsten  valued  at  $100,000.  Lode  mining  in 
other  districts  has  been  out  of  the  question  as  yet,  but  there 
lias  been  a  large  amount  of  prospecting  which  has  shown  that 
lode  mining  is  to  be  an  important  industry  as  soon  as  trans- 
portation and  power  can  be  had  at  a  reasonable  price. 


480         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Handicap  of  Increasing  Costs 

The  mining  industry  of  the  interior  has  suffered  heavily 
during  the  past  three  years  because  of  the  increasing  cost  of 
supplies,  the  shortage  of  labor  and  the  high  cost  of  fuel  for 
power.  The  first  two  were  caused  directly  by  the  world  war, 
while  the  third  has  been  due  to  the  scarcity  of  wood  in  the 
vicinity  of  the  mines.  The  advance  due  to  war  conditions  in 
the  cost  of  all  machinery,  hardware,  provisions,  clothing  and 
other  supplies  throughout  the  entire  United  States  is  too  well 
recognized  to  need  further  comment.  But  taken  in  conjunction 
with  the  depreciated  purchasing  power  of  gold,  the  chief 
product  of  the  mines  in  the  interior,  it  has  caused  a  decided 
slowing  down  of  the  industry.  For  it  is  manifest  that  when 
all  other  values  increase  with  respect  to  a  standard  which  re- 
mains fixed,  and  that  standard  happens  to  be,  as  in  this  case, 
the  principal  product  of  a  mining  industry,  not  only  profits,  but 
even  the  possibility  of  working  at  all  will  soon  be  out  of  the 
question.  If,  then,  mining  is  to  continue  in  this  district,  there 
must  be  some  other  compensation,  such  as  cheaper  power,  to 
offset  this  handicap. 

The  shortage  of  labor  was  caused  in  part  by  the  enlistment 
and  drafting  for  military  service  of  the  youngest  and  strongest 
of  the  miners,  which  made  it  necessary  for  the  mines  to  work 
short-handed,  while  such  labor  as  could  be  secured  was  not  able 
to  do  the  same  amount  of  work  as  the  younger  and  stronger 
men  who  had  left,  causing  a  further  decrease  in  production  for 
the  same  wage  cost.  And  the  shortage  of  labor  was  further 
enhanced  by  the  tempting  offers  of  employment  at  high  wages 
in  the  States,  which  attracted  many  other  miners  away  from 
the  interior.  But  even  the  shortage  of  labor  and  high  cost  of 
supplies  might  have  been  successfully  overcome  if  fuel  for 
power,  which  plays  such  a  large  part  in  the  cost  of  mining  here, 
had  been  available  at  a  reasonable  price. 

Scarcity  of  Fuel 

When  the  placer  mines  were  first  discovered  an  abundance 
of  fuel  was  to  be  had  on  the  tree-clad  slopes  and  bottoms  of  the 
valleys.  Wood  was  plentiful  and  could  be  obtained  at  a  reason- 
able cost.  But  after  a  few  years  of  using  this  timber  as  fuel  a 
shortage  began  to  be  apparent,  which  has  increased  and  grown 


ALASKA,  A  NATIONAL  OPPORTUNITY  481 

more  stringent  annually,  until  we  have  reached  the  condition 
where  practically  all  of  the  available  timber  on  the  important 
older  creeks  has  been  cut  and  burned,  and  on  several  of  them 
even  the  very  stumps  have  been  torn  from  the  ground  and  used 
for  fuel.  The  cost  of  securing  wood  has  increased  to  a  point 
where  a  price  of  $16  or  $17  per  cord  is  not  exceptional,  as  com- 
pared with  $5  or  $6  a  few  years  ago.  But  even  in  favored 
localities,  where  wood  can  still  be  had  at  a  nominal  price,  it 
should  not  be  used  as  fuel  under  any  conditions  that  have  a 
regard  for  the  future,  because  the  time  can  easily  be  foreseen 
when  such  timber  will  be  needed  urgently  for  mining  and  build- 
ing purposes.  It  should,  therefore,  be  conserved  for  such  use. 

Must  Have  Power 

The  problem  of  cheaper  power  is  such  a  vital  element  in  the 
cost  of  mining  here  that  there  can  never  be  any  extensive 
development  of  the  latest  resources  of  the  interior  of  Alaska 
until  it  is  satisfactorily  solved.  The  entire  district  depends 
directly  or  indirectly  upon  the  mining  industry,  not  only  for  its 
present  existence,  but  also  for  its  entire  future  growth.  There 
are  big  possibilities  in  agriculture,  to  be  sure,  possibilities 
which  have  been  demonstrated  beyond  question  by  the  won- 
derful farming  that  is  now  being  done  in  the  Tanana  Valley. 
But  because  of  remoteness  the  farmer  cannot  hope  to  ship  his 
produce  to  the  United  States  at  a  profit  and  must,  therefore, 
look  to  local  consumption  for  his  market.  And  what  is  the 
source  of  that  consumption?  The  mining  industry  and  the 
attendant  commerce  depending  directly  upon  it.  If  the  mining 
industry  fails,  agriculture  must  fail  also  through  sheer  inani- 
tion, or  else  be  so  seriously  crippled  that  it  may  perhaps  never 
realize  the  opportunities  that  are  now  in  sight.  And  the  mining 
industry  cannot  hope  to  advance  unless  power  can  be  had  more 
cheaply  than  at  present. 

The  placer  workings,  upon  which  this  portion  of  Alaska  has 
been  so  dependent  in  the  past,  have  reached  the  point  where 
most  of  the  bonanzas  have  been  exploited.  And  lode  mining 
for  any  but  the  highest  grade  of  ore  has  as  yet  been  unthink- 
able. But  there  remain  untouched  many  million  yards  of  lower 
grade  placer  gravel,  containing  nearly  twice  as  much  gold  as 
has  thus  far  been  recovered,  that  can  and  will  be  mined  as  soon 


482         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

as  cheaper  power  and  supplies  are  available ;  while  the  produc- 
tion to  be  had  from  lode  mining  under  such  conditions  has  not 
even  been  scratched  on  the  surface.  With  the  completion  of 
the  Government  railroad,  supplies  will  be  cheaper.  But  any 
reduction  here  must  be  accompanied  by  a  marked  decrease  in 
the  cost  of  power,  especially,  for  large  operations,  where  power 
is  such  a  considerable  item  of  cost,  because  any  possible  reduc- 
tion in  freight  rates  on  supplies  cannot  be  sufficient  to  lower 
the  cost  of  mining  materially.  Cheaper  power  alone  offers  the 
key  to  unlock  interior  Alaska's  resources. 

Alaska  Chapter  Takes  Hand 

Realizing  the  importance  of  this  question  the  Alaska  Chapter 
of  the  American  Mining  Congress  undertook  to  find  a  solution 
of  the  problem  and  appointed  the  speaker  as  chairman  of  a 
committee  to  co-operate  with  the  Alaska  Station  of  the  Bureau 
of  Mines,  which  was  working  along  similar  lines.  Several 
months  were  spent  in  making  a  careful  survey  of  the  resources 
of  the  district  in  order  to  have  definite  facts  and  data  upon 
which  to  base  their  recommendations.  The  estimates  have  been 
checked  and  verified  by  conferences  with  prospectors,  mining 
men  and  mining  operators  actively  engaged  in  the  district  for 
the  past  12  or  15  years,  as  to  details  regarding  ground  of  which 
these  men  have  intimate  personal  knowledge.  It  was  the  aim 
of  the  committee  to  err  on  the  conservative  side,  if  at  all,  and 
the  figures  are  but  a  fraction  of  what  many  men  familiar  with 
the  district  feel  and  know  to  be  the  potential  resources  here. 
The  estimates  of  power  cost  have  been  verified  by  a  number  of 
experts  of  the  Bureau  of  Mines  engaged  in  fuel  investigation. 
And  the  entire  work  has  received  the  hearty  support  of  the 
Alaska  Chapter  and  the  co-operation  of  mining  men  and  opera- 
tors in  the  interior  of  Alaska.  The  findings  and  recommenda- 
tions of  the  committee  have  been  incorporated  in  a  report  by 
the  superintendent  of  the  Alaska  Station,  which  is  now  in 
process  of  publication  by  the  Bureau  of  Mines,  and  of  which 
the  following  is  a  brief  summary. 

To  Utilize  Lignite 

The  remedy  for  the  fuel  shortage  in  the  interior  of  Alaska 
lies  in  the  utilization  of  the  lignite  deposits  of  the  Nonana  field. 


ALASKA,  A  NATIONAL  OPPORTUNITY  483 

Here  there  are  available  some  nine  billion  tons  of  fuel ;  but  the 
problem  is  not  as  simple  as  it  would  appear.  This  fuel  is  lignite 
and  possesses  all  the  disadvantages  germane  to  lignites  the 
world  over.  It  contains  nearly  30  per  cent,  of  moisture,  which 
becomes  a  serious  consideration  when  transporting  to  the 
mining  district,  not  only  over  the  railroad,  but  by  the  necessary 
wagon  haul  as  well,  over  roads  that  are  practically  impassable 
a  good  part  of  the  time.  And  a  ton  of  lignite  does  not  represent 
a  ton  of  fuel,  but  only  1,400  to  1,500  pounds.  The  moisture 
causes  slacking,  disintegration  and  a  tendency  to  spontaneous 
combustion,  which  result  in  loss  and  waste  in  handling  and  pre- 
vent the  accumulation  of  stock  piles  or  storage.  The  moisture, 
a  high  volatile  content,  and  a  lack  of  coking  properties  con- 
tribute to  make  its  use  almost  hopelessly  inefficient  at  the  small 
and  more  or  less  makeshift  plants  in  the  mining  districts;  so 
that  even  if  the  Government  railroad  were  to  carry  the  lignite 
free  over  its  lines,  the  cost  of  producing  power  at  the  individual 
mines  would  not  be  sufficiently  less  than  at  present  to  afford 
any  appreciable  relief  to  the  industry. 

A  Central  Power  Plant 

But  if  this  fuel  is  utilized  in  a  central  power  plant,  located 
in  the  heart  of  the  lignite  fields  to  avoid  all  transportation 
charges,  and  employing  the  modern  equipment  properly  de- 
signed to  burn  lignite  to  its  best  advantage,  such  as  would  be 
warranted  in  an  installation  of  this  kind,  power  could  be  gen- 
erated and  transmitted  electrically  to  the  mining  districts  at 
one-fourth  to  one-sixth  of  the  present  cost  of  generating  it  at 
the  individual  mines.  And  herein  lies  the  solution  of  the 
problem. 

At  a  price  even  approximating  these  figures  there  is  a 
present  and  immediate  demand  for  approximately  5,000  horse- 
power. A  central  plant  of  this  capacity,  including  the  neces- 
sary transmission  lines  and  other  accessories,  can  be  built  for 
$4,750,000.  The  installation  of  such  a  plant  will  create  an 
ever-growing  market  for  power,  because  of  the  development  of 
mineral  resources  the  district  is  known  to  possess,  so  that  pro- 
vision must  be  made  for  enlargement  as  needed  to  a  capacity 
of  at  least  20,000  horsepower.  The  ultimate  cost  of  a  plant  this 
size  is  $9,000,000.  With  the  initial  installation,  power  can  be 


484         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

furnished  in  the  mining  districts  at  2%  cents  per  kilowatt  hour. 
But  the  greater  output  and  consequent  reduction  of  fixed 
charges  and  operating  expenses  of  the  ultimate  installation  will 
make  it  possible  to  reduce  the  cost  of  power  to  at  least  1%  cents 
per  kilowatt  hour.  This  is  equivalent  to  less  than  $95  per 
horsepower  year,  as  compared  with  $600  and  even  $700  per 
horsepower  year,  the  cost  of  power  for  mining  under  present 
fuel  conditions. 

Power  Is  Salvation 

Power  at  this  price  will  be  the  salvation  of  the  interior  of 
Alaska.  It  will  make  it  possible  to  mine  placer  ground  that 
cannot  be  thought  of  at  present.  It  will  insure  the  installation 
of  large  dredges,  thus  establishing  a  business  which  will  be 
operated  on  principles  just  as  sound  and  conservative  as  those 
of  any  manufacturing  concern.  It  will  revolutionize  the  lode 
mining  industry  by  removing  its  present  restriction  to  the 
more  richly  endowed  spots  and  by  enabling  the  mining  of  lower 
grade  ore ;  and  it  will  also  encourage  the  development  of  pros- 
pects and  stimulate  the  search  for  new  deposits.  With  the 
future  of  the  mining  industry  secured,  the  outlook  for  agricul- 
ture is  a  roseate  one,  because  the  farmer  will  have  a  dependable 
and  ever  increasing  market  for  his  products.  And  an  increase 
of  population  will  follow  that  will  insure  the  success  of  the 
Government  railroad  beyond  even  the  dreams,  possibly,  of  its 
most  ardent  advocates. 

The  power  plant  should  be  built  by  the  Government  of  the 
United  States  because,  as  agent  for  the  owners  of  98  per  cent. 
of  all  the  land  in  the  Territory,  it  is  most  vitally  interested  in 
the  future  of  Alaska.  It  is  today  building  a  railroad  from  tide- 
water to  the  interior  at  a  cost  of  $52,000,000,  based  upon  a  well- 
grounded  faith  in  the  development  of  the  district.  But  the 
realization  of  this  faith  depends  inevitably  upon  the  future  of 
the  mining  industry,  for  which,  as  we  have  seen,  cheaper  power 
is  absolutely  essential.  For  this  reason,  therefore,  if  for  no 
other,  it  will  be  sound  business  judgment  to  invest  the 
$9,000,000  for  a  power  plant  in  order  to  insure  the  success  of  a 
$50,000,000  expenditure. 


ALASKA,  A  NATIONAL  OPPORTUNITY  485 

Big  Revenue  Returns 

But  there  are  other  equally  important  reasons.  The  Govern- 
ment needs  a  large  reserve  of  gold  to  secure  the  extended  credit 
necessitated  by  the  world  war.  The  country  needs  to  replenish 
the  metals  wasted  during  that  struggle.  And  the  nation  has  a 
huge  debt  that  it  will  require  years  to  discharge.  Interior 
Alaska  has  the  gold  and  many  of  the  metals,  requiring  only 
cheap  power  to  unlock  them.  And  the  development  of  the  latent 
resources  and  the  prosperity  that  will  accompany  a  flourishing 
mining  industry  will,  merely  as  an  increased  source  of  taxation, 
go  far  toward  paying  the  huge  war  debt. 

It  is  essential  that  the  power  be  supplied  as  cheaply  as  pos- 
sible. The  Government  can  afford  to  sell  power  at  the  actual 
cost  of  production,  while  private  capital  would  require  a  good- 
sized  profit.  And  with  Government  operation  the  cost  of  pro- 
duction will  be  less  than  with  private  ownership  because  the 
fixed  charges,  which  are  necessarily  a  large  proportion  of  the 
cost  of  power,  will  be  reduced  to  a  minimum.  For  the  United 
States  can  borrow  money  at  4  per  cent,  instead  of  6  or  8  per 
cent.,  and  hence  would  need  to  charge  but  this  amount  on  its 
investments;  it  can  wait  20  years  instead  of  10  for  the  return 
of  its  capital ;  and  it  does  not  pay  taxes  or  carry  insurance ;  all 
of  which  as  increased  fixed  charges  would  add  very  consider- 
ably to  the  cost  of  power  if  it  were  to  be  furnished  by  a  private 
corporation. 

Must  Have  Quick  Help 

The  work  must  be  undertaken  quickly,  however,  because  the 
mining  industry  of  the  interior  is  facing  a  grave  crisis.  Costs 
are  prohibitive,  except  for  extremely  rich  bonanzas,  and  the 
cream  has  already  been  skimmed  from  most  of  these.  The 
completion  of  the  railroad  will  help  by  reducing  the  cost  of 
supplies,  but  it  cannot  of  itself  solve  the  problem  entirely 
because  it  cannot  furnish  the  prime  essential  factor — that  of 
cheap  power.  Without  this  no  advance  can  be  predicted  for  the 
mining  industry  of  the  interior ;  and  unless  relief  is  in  sight  at 
once,  the  small  population  that  has  remained  through  the  past 
stress  of  dark  days  will  drift  away.  The  district  will  lose  a 
people  inured  to  the  rigors  and  hardships  of  an  Arctic  winter 
climate,  understanding  fully  the  conditions  and  difficulties  of 


486         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

mining  such  as  are  to  be  found  only  here,  an  understanding 
obtained  by  years  of  work  and  experience.  It  will  lose  a  people 
of  the  rugged  pioneer  type  having  a  vision  of  the  future  that  is 
invaluable.  Years  will  be  required  to  replace  them,  if  ever, 
and  the  loss  will  be  incalculable.  It  is  not  safe  to  assume  that 
under  a  continuance  of  present  conditions  the  country  will 
remain  even  stationary.  Frontier  countries  do  not  remain  at 
a  standstill;  they  either  advance  or  they  decline,  and  once 
started  the  descent  is  rapid. 

A  Business  Proposition 

It  rests  with  the  people  of  the  nation  to  determine  the  future 
course  of  the  interior  of  Alaska ;  whether  the  outcome  of  the 
crisis  is  to  be  unparalleled  development  or  a  rapid  and  sudden 
reversion  to  the  conditions  of  sporadic  hunting  and  fishing  that 
prevailed  before  the  discovery  of  gold,  such  as  must  surely 
result  unless  cheaper  power  can  be  obtained  for  the  mining 
industry.  But  with  power  at  the  price  to  be  had  from  a  plant 
like  the  one  just  discussed,  the  future,  and  a  glorious  one,  is 
assured  for  the  mining  industry,  for  agriculture,  for  the  Gov- 
ernment railroad,  and  for  the  settlement  and  development  of 
the  country  that  will  accompany  them.  The  resources  are  here 
and  need  only  to  be  developed.  The  American  people  are  said 
to  lead  the  world  in  shrewd  business  acumen.  Will  it  be  either 
patriotic,  or  shrewd,  or  business-like,  to  let  this  golden  oppor- 
tunity slip  between  our  fingers  ? 


INDUSTRIAL  DEMOCRACY  487 

INDUSTRIAL  DEMOCRACY 

By  JOHN  LEITCH,  Industrial  Engineer,  New  York 

You  have  heard  about  men  who,  in  the  city,  would  get  hold 
of  a  farmer  and  sell  him  the  public  building  of  the  place,  when 
they  did  not  own  it  to  begin  with.  Well,  you  are  going  to  have 
that  kind  of  a  "gold  brick  game"  played  on  you  right  now.  I 
am  going  to  sell  you  something  that  I  don't  own ;  I  am  going  to 
sell  you  something  that  you  own ;  I  am  going  to  sell  to  you  your 
own  organization.  I  tell  you  in  advance  to  watch  me,  to  see 
that  I  have  nothing  up  my  sleeve  and  that  there  are  no  tricks 
to  conceal.  I  am  going  to  sell  you  something  that  you  already 
own  but  you  don't  fully  value. 

I  am  reminded  of  the  story  that  is  supposed  to  have  hap- 
pened some  fifty  years  ago,  when  our  words  did  not  mean  quite 
the  same  as  they  do  now.  For  instance,  instead  of  saying, 
"Have  you  your  reference  with  you?"  they  would  say,  "Have 
you  your  character  with  you?"  With  that  explanation  I  will 
go  ahead  with  the  story. 

A  boy  came  into  a  large  retail  establishment  that  had  adver- 
tised for  a  boy,  and  among  others  he  was  picked  out  as  the 
particular  one  the  proprietor  thought  would  meet  the  needs — a 
red-headed  boy  who  looked  bright  and  on  the  job.  So  the  pro- 
prietor said  to  him :  "Well,  son,  have  you  got  your  character 
with  you?"  He  said:  "No,  I  haven't;  I  got  it  at  home  and  T 
will  go  and  get  it."  The  proprietor  said :  "You  go  home  and 
get  it  and  come  back  tomorrow  morning." 

About  3  o'clock  the  boy  came  back  and  the  proprietor  said : 
"I  thought  I  told  you  to  come  back  tomorrow  morning.  How- 
ever, have  you  got  your  character?"  "No,"  he  said,  "I  ain't, 
but  I  got  yours  and  I  ain't  coming."  [Laughter.] 

Labor  Picking  Jobs 

Did  I  say  that  happened  fifty  years  ago  ?  That  is  what  labor 
is  telling  you  today.  Labor  is  picking  jobs,  proprietors  are  not 
picking  men ;  therefore,  I  say  to  those  who  wake  up  to  the  situ- 
ation: "Let's  make  a  character  of  our  institution  that  will 


488         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

make  'the  boys'  say :  'I  want  to  work  there/  "  That  is  exactly 
what  confronts  us  today — the  need  for  character  in  the  insti- 
tution. 

We  have  built  character  in  the  individual,  our  mothers  did 
much  of  that  for  us,  but  since  mother  got  off  the  job  and  it  has 
been  left  to  us  we  have  had  to  build  our  own  character  and  we, 
as  individuals,  have  recognized  the  need  for  that  thing. 

Two  men  come  to  sell  you  something;  one  a  man  of  very 
evident  integrity,  the  other  a  very  smooth  talker — both  of  them 
use  identical  arguments,  no  change,  maybe,  in  the  phraseology, 
maybe  not  a  change  in  a  word.  From  one  man  you  buy,  from 
the  other  man  you  take  nothing.  You  don't  believe  him.  What 
is  the  difference?  Character.  The  character  that  radiates 
from  the  man.  And  now  is  the  time  when  we  must  step  for- 
ward and  do  a  wholesale  business  on  character  building. 

Establishing  Character  for  Business 

Instead  of  merely  making  a  character  for  a  man,  and  that 
man  being  myself,  if  I  am  at  the  head  of  an  institution  it  is 
my  job  to  make  a  character  for  that  institution,  because  we  are 
doing  business  with  institutions  today  while  formerly  we  did 
business  with  individuals.  Business  has  grown;  it  is  beyond 
the  reach  of  one  man's  hand,  and  the  institution  must  have  a 
character.  Therefore,  put  into  business  or  into  an  institution 
a  definite,  distinct  set  of  principles  by  which  it  will  operate, 
just  as  for  an  individual  it  is  necessary  for  you  and  me  to  say : 
"Regardless  of  the  work  that  I  do,  regardless  of  the  goods  that 
I  may  handle,  regardless  of  the  line  of  business  I  may  be  in,  I 
will  be  an  honest  man."  [Applause.] 

Then,  touching  a  bit  on  economics  and  getting  down  to  what 
we  do  now  realize  to  be  an  absolute  necessity,  we  then  say,  as 
an  individual — second  point  in  my  character — "I  must  be  a 
man  who  co-operates,  and  I  will  set  that  as  being  one  of  the 
standards  upon  which  my  life  will  be  conducted,  because  I 
know  that  no  one  man  has  ever  done  a  great  thing  alone." 

Columbus  started  out  and  went  a  considerable  distance  with- 
out opposition,  and  after  a  while  his  sailors  struck;  they 
wanted  to  put  him  in  chains  in  the  hold  of  the  vessel  and  turn 
around  and  go  back  to  solid  land.  They  were  afraid  that  that 
horizon  line  was  the  place  where  the  ship  could  go  over  the 


INDUSTRIAL  DEMOCRACY  489 

edge  of  the  world.  They  had  no  faith ;  he  had  faith.  He  would 
not  have  arrived  here  and  you  and  I  probably  would  not  have 
arrived  here  if  the  doubters  had  succeeded.  He  must  have 
taught  his  people  co-operation ;  he  must  have  gotten  from  his 
people  co-operation.  He  probably  did  not  sit  in  his  private 
office  and  damn  labor ;  he  probably  did  not  call  in  from  the  out- 
side an  expert  to  cure  his  difficulties.  There  were  none  to  be 
had. 

He  went  to  his  people  and  spoke  directly  to  them,  and  the 
man  who  runs  the  ship  today  must  go  directly  to  his  people  and 
speak  to  his  people  that  he  may  be  known  as  a  man,  as  a  friend, 
as  a  human,  as  one  through  whom  red  blood  flows — not  ice 
water — and  not  be  known  by  his  "sailors"  as  the  head  of  a 
"soulless  corporation." 

Man  to  Man 

"Man  to  Man,"  the  title  of  my  book,  is  built  around  that  idea 
of  directly  coming  in  contact  with  our  people — man  to  man. 
You  cannot  go  out  and  see  each  one  as  an  individual  where  you 
employ  thousands  of  men,  but  you,  as  an  individual,  have  the 
opportunity  of  appearing  before  your  entire  mass  once  in  a 
while — and  you  ought  to  make  it  more  often  than  that — and 
you  can  then  pour  into  them,  and  through  willing  ears,  your 
aims,  your  ambitions.  Not  your  individual  aims,  not  your 
personal  aims;  they  are  not  interested  in  that  any  more  than 
you  are  interested  in  my  personal  aims.  You  can  pour  into 
them,  and  through  willing  ears,  the  aims  of  the  institution,  the 
opportunities  of  the  institution,  ths  obstacles  of  the  institution. 
They  will  help  you  with  the  aims  and  they  will  help  you  to  over- 
come the  obstacles. 

That  is  not  theory,  it  is  a  fact;  I  know  it.  I  have  seen  it  done 
in  47  corporations,  in  many  lines  of  business.  I  wish  I  could 
say  that  I  had  seen  it  done  and  carried  forward  to  completion 
in  the  mining  business.  Then  there  would  not  be  a  man  here 
who  could  say :  "That  may  be  all  right  in  a  shop  or  a  factory, 
in  a  steel  mill,  a  manufacturing  plant,  or  where  they  make 
hosiery  or  hats,  or  a  newspaper  plant,  or  an  automobile  plant, 
and  so  on,  but  it  would  not  fit  the  mining  business." 

You  know  the  shoe  man  said  that,  too;  the  hosiery  fellow 
said  that,  too;  the  coat  manufacturer  said  that,  and  the  ma- 


490         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

chine  shop  man  said  that,  and  every  one  of  those,  who  now  know 
the  contrary,  said :  "It  may  apply  in  these  other  lines  of  busi- 
ness, but  it  won't  apply  to  mine."  So  I  assume,  and  I  guess  I 
am  95  per  cent,  right,  you  say :  "Democracy  will  apply  in  other 
shops,"  and  you  have  forty  other  reasons  why  it  won't  apply  in 
yours,  but  you  are  wrong — it  will  apply  to  mining,  because  it 
applies  to  men. 

A  Work  with  Men 

Industrial  democracy  is  not  a  matter  of  digging  up  metals 
out  of  the  ground ;  it  is  not  a  matter  of  digging  up  production 
out  of  a  machine;  it  is  not  a  matter  of  making  shoes,  nor 
hosiery,  nor  automobiles,  nor  flour,  nor  phonographs,  nor 
pianos,  nor  all  these  other  different  things  that  we  call  our 
finished  product.  Industrial  democracy  is  a  matter  of  taking 
not  raw  materials  such  as  we  call  material  things  of  the  low 
degree  such  as  ore,  coal  or  iron,  or  copper,  or  trees,  and  turning 
them  into  either  pianos  or  furniture  or  machinery  or  any  of 
these  other  things  that  we  sell  on  the  market. 

Industrial  democracy  is  the  matter  of  taking  the  best  raw 
material  that  God  Almighty  put  on  this  earth — man — and  turn- 
ing him  into  a  finished  product — the  master  man.  That  is  your 
job  and  mine.  [Applause.] 

In  the  history  of  humanity  you  will  find  that  man  has  grown 
in  proportion  as  he  took  first  the  raw  materials  of  low  grade 
and  worked  them  up  into  a  finished  product,  an'd  humanity  has 
taken  steps  forward  in  proportion  as  we  have  discovered  the 
higher  grade  materials  and  worked  on  them.  We  have  begun 
to  work,  just  recently,  in  that  very  fine,  high-grade  stuff  that 
you  cannot  see — electricity. 

Man  made  quite  an  advance  when  he  took  that  step;  far 
ahead  of  the  man  who  took  raw  material  of  wood  and  turned 
it  into  bows  and  arrows,  or  iron  and  turned  it  into  a  battle-axe ; 
far  ahead  of  those  men  who  handled  that  raw  and  common 
material.  As  we  come  up  the  line  the  evidence  that  we  are 
coming  forward  is  shown  in  the  class  of  materials  in  which  we 
work. 

Now  our  job  is  not  in  the  working  of  lead,  iron,  copper,  gold, 
silver  or  any  of  those  other  metals,  but  our  job  from  now  for- 
ward— and  we  are  a  little  late  in  starting — is  operating  with 


INDUSTRIAL  DEMOCRACY  491 

the  gems  of  creation.  Not  until  all  the  things  were  made  did 
the  Creator  come  out  with  man,  and  we  are  now  working  in 
that  line  and  we  are  just  starting. 

Practical  Democracy 

I  should  tell  you  who  have  not  read  the  book,  "Man  to  Man," 
or  the  story  of  "Industrial  Democracy,"  that  it  contemplates 
taking  an  organization  as  it  is  and  merely  changing  the  names 
of  two  bodies  that  operate  business — namely,  executives  and 
foremen,  and  instead  of  calling  the  executives  the  "bosses,"  we 
form  them  into  a  body  called  the  "cabinet."  It  appeals  to  the 
American  mind,  whether  foreign-born  or  not.  It  has  some- 
thing to  do  with  democracy,  and  it  has  nothing  to  do  with 
autocracy.  It  appeals  to  the  American  mind  as  practical 
democracy  in  industry. 

The  Cabinet  meets  as  a  body  the  same  as  they  did  before  as 
executives.  The  Cabinet,  however,  instead  of  taking  all  of  the 
burdens  of  the  business,  have  two  co-operators  who  assist  them 
in  the  conduct  of  the  business.  The  body  next  around  the 
Cabinet  is  the  Senate.  It  is  composed  of  department  heads  and 
foremen.  They  get  together  regularly  every  week  and  meet 
as  a  Senate. 

Your  workers  get  together  and  elect  a  House  of  Representa- 
tives by  secret  ballot.  Now,  some  of  you  are  beginning  to 
shiver  and  think  you  are  turning  over  to  the  "Bolsheviki"  the 
management  of  the  business.  But  you're  not.  Ask  anybody 
who  ever  has  had  Industrial  Democracy  actually  at  work — get 
the  facts;  don't  theorize — and  you  will  find  that  the  working 
man,  working  through  his  House  of  Representatives,  is  a  co- 
operator  and  a  constructive  force. 

But  we,  not  having  seen  these  things,  have  allowed  the  work- 
ingman  to  elect  his  delegates  to  another  kind  of  a  house,  and 
to  have  that  other  house  led  by  Bolshevik  and  destructive 
elements,  and  we  have  gone  sound  asleep  while  he  was  doing  it 
until  these  recent  times,  and  now  we  say :  "What  shall  we  do?" 

After  having  let  it  happen,  it  is  up  to  you  and  to  me,  the  real 
leaders  of  business,  to  lead  in  business.  Our  leadership  is  about 
or  almost  taken  away  from  us.  The  fact  of  the  matter  is  there 
was  not  much  to  take  away,  because  we  were  not  real  leaders. 
That  is  why  it  was  so  easy  to  get  it  away  from  us.  But  men 


492         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

who  knew  how  to  lead  men  have  stepped  in  and  led  men,  or 
misled  them,  and  that  is  the  serious  side  of  present  affairs. 

Don't  Blame  Labor 

Here  is  the  better  side  of  it,  and  usually  on  the  better  side 
we  find  the  greater  truth:  We  must  not  blame  labor  with 
present  conditions.  It  is  not  the  fault  of  labor.  The  minority 
of  labor  is  unionized.  A  minority  of  those  who  are  unionized 
attend  union  meetings,  and  a  great  minority  of  those  who 
attend,  usually  one  man,  leads  that  small  minority,  and  that 
minority  dictates  to  union  labor  what  it  shall  do.  Why? 
Because  union  labor  has  few  constructive  leaders,  and  the  great 
mass  are  constructive  and  they  do  not  want  the  "radical" 
leader.  They  have  told  me  so. 

Great  Cry  for  Leadership 

I  have  met  hundreds  of  thousands  of  them,  been  into  many 
homes,  walking  constantly  through  plants,  where  I  go  directly 
to  the  machines  where  the  boys  are  on  the  job.  I  have  talked 
to  them  en  masse;  I  have  heard  their  stories.  Labor  wants 
constructive  action,  and  if  you  sit  still  and  think,  be  quiet  and 
listen,  and  if  you  have  any  ears  that  really  can  get  to  the 
ground,  you  will  find  that  labor  is  constructive  and  they  are 
crying  for  a  constructive  leadership.  They  are  asking  you  and 
me  to  get  on  the  job,  and  they  are  the  great  majority,  and  when 
the  great  majority  organize  the  minority  won't  cut  much  ice. 
That  is  the  way  you  will  dispose  of  Bolshevism.  Bolshevism  is 
very  much  in  the  minority,  but  the  minority  is  organized  and 
we,  the  majority,  are  sitting  around  saying:  "What  shall  we 
do?" 

It  reminds  me  of  a  very  old  story :  One  of  the  greatest  lead- 
ers of  men,  who  could  certainly  take  a  "riff-raff"  and  develop 
them,  was  old  man  Moses.  He  had  all  the  advantages  of  living 
in  a  king's  household  and  getting  the  education  that  the  people 
of  the  royal  family  and  the  priests  only  could  get.  Wisdom 
was  not  permitted  to  be  handed  out  to  those  except  in  authority 
in  the  king's  household,  among  the  nobles  and  the  priests  of 
the  time. 

Moses  had  an  opportunity  to  get  that  wisdom.  Moses  also 
lived  in  the  luxury  of  a  king's  household.  He  had  things  pretty 


INDUSTRIAL  DEMOCRACY  493 

soft,  but  Moses  was  a  big  enough  man,  however,  to  get  out  of 
his  easy  job,  to  come  out  of  his  highly  decorated  and  very  com- 
fortable private  office  and  reach  down  to  his  people  and  raise  a 
nation  out  of  slavery  to  a  national  life. 

Thinking  on  the  Job 

We  need  men  like  Moses  today.  Don't  think  it  is  altruism — 
it  pays.  I  would  rather  have  the  mine  full  of  thinking  men 
than  a  mine  full  of  slaves,  wouldn't  you  ?  I  would  rather  have 
an  organization  of  men  who  think  on  the  job  than  a  mass  of 
men  who  do  not  think  on  the  job.  I  am  suggesting  that  we  get 
that  kind  by  making  that  kind  out  of  what  we  have,  taking  that 
raw  material  and  working  it  up  into  a  finished  product. 

Another  suggestion  in  the  process :  It  can  be  done  and  has 
been  done,  not  only  scores  of  times,  but  there  are  literally  thou- 
sands of  companies  in  this  country  today  that  are  doing  it,  and 
they  took  that  book,  "Man  to  Man,"  on  industrial  democracy, 
and  have  installed  industrial  democracy  in  their  plants  with- 
out any  aid  except  that  book  as  a  basis  of  that  idea. 

I  am  talking  pretty  loud  about  my  own  book.  It  isn't  my 
own  book.  No  man  owns  an  idea — a  real  idea  is  bigger  than 
any  man  living,  and  this  idea  is  so  much  bigger  than  I  am  that 
I  have  a  hard  time  filling  my  job-  I  am  trying  to  work  for  that 
idea,  and  I  wish  you  would  work  for  it,  too.  Because  it  is  right; 
it  is  constructive;  it  leads  toward  American  citizenship;  it 
turns  our  foreign  thinking  people,  who  do  not  understand  much 
about  democracy,  into  a  living,  breathing  bunch  of  men,  who 
understand  democracy  because  they  have  it.  It  is  on  the  job 
in  the  mine  and  the  plant  and  in  many  different  institutions 
throughout  the  country. 

Train  Aliens  in  Business 

How  else  can  we  train  our  foreign  people  to  understand  our 
American  principles  unless  we  train  them  in  the  daily  opera- 
tion of  the  business  ?  Where  is  there  a  better  method  ?  I  am 
not  arguing  in  favor  of  this  because  it  is  mine.  It  is  not  mine ; 
I  am  only  a  second-hand  clothes  dealer.  I  am  sorry  to  say  I  did 
not  originate  the  idea,  but  I  can  give  you  the  names  of  the  men 
who  did.  One  was  a  fellow  by  the  name  of  John  Quincy  Adams, 
another  fellow  was  John  Hancock  and  many  others  about  that 


494         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

time  whose  names  you  know.  They  had  such  a  big,  broad 
vision  that  they  did  not  stop  and  say :  "Where  has  this  been 
done?  Will  it  operate  in  this  particular  spot  on  the  geography? 
Will  it  work  out  with  this  conglomerate  mass  from  all  nations  ? 
Will  it  make  good  with  this  bunch  of  foreigners  that  we  have 
here  in  the  United  States?"  No.  And  if  they  had  asked  those 
questions,  they  could  have  had  no  answer,  not  from  the  out- 
side. They  could  have  had  no  answer  from  any  place  that  had 
operated  it,  because  there  was  no  precedent. 

Those  men  had  to  do  pure  thinking.  Did  you  ever  try  it? 
Those  men  saw  an  idea,  were  so  convinced  that  the  thing  was 
right  that  they  did  it  because  it  was  right,  not  because  it  was 
done  in  the  copper  mine  across  the  way,  or  some  plant  down  in 
Massachusetts,  or  in  some  place  over  in  Europe.  They  took  a 
brand-new  concept  and  they  said :  "This  thing  is  right,  there- 
fore we  will  do  it  and  we  will  risk  our  lives  in  doing  it,-'  We, 
in  business,  do  not  have  to  do  that  today. 

They  were  great  men  who  did  that,  and  they  put  it  into  a 
plant.  I  do  not  know  how  many  people  they  had,  but  they  had 
several  million  in  their  plant  then,  and  that  plant  has  grown 
until  it  is  now  the  United  States  of  America  with  one  hundred 
and  ten  million  people  in  it.  It  is  still  sticking  to  the  same  poli- 
cies, and  it  has  become  the  most  prominent  nation  of  the  earth, 
and,  incidentally,  the  most  prosperous  and  most  profitable. 

Democracy  Will  Work  Anywhere 

Can  any  man  tell  me  that  a  principle  that  will  operate  to 
such  an  extent  as  that  is  not  strong  enough  to  operate  in  a 
little  plant  that  employs  maybe  ten  or  fifteen  thousand  people  ? 
How  foolish !  I  say  today :  "Come  on ;  let's  get  together  and 
think.  Let's  not  ask  where  this  thing  has  been  done.  Use  your 
head.  That  is  what  it  was  put  there  for.  Let's  do  a  thing 
because  it  is  right,  not  because  some  other  fellow  made  money." 

That  is  the  kind  of  men  we  want.  We  have  had  George 
Washingtons  in  our  political  life  that  have  helped  make  our 
nation,  helped  to  give  it  birth,  helped  to  nurse  it  and  coddle  it 
when  it  needed  that  nursing  and  coddling.  We  had  an  Abra- 
ham Lincoln,  who  saw  the  country  divided  in  two,  but  who  had 
love  enough  for  man,  regardless  of  whether  it  was  North  or 
South,  and  put  that  love  out  to  them  in  such  shape  that  he  drew 


INDUSTRIAL  DEMOCRACY  495 

them  together  in  one  bond,  in  spite  of  their  opposition.    That 
is  what  we  call  "love." 

Put  Love  Into  Business 

We  have  to  put  love  into  the  business.  Forget  it  as  a  thing 
that  exists  between  a  man  and  his  wife,  or  a  mother  and  father 
for  the  child.  That  is  big  love,  but  the  kind  of  love  we  should 
have  is  the  kind  that  Abraham  Lincoln  had  and  the  kind  that 
George  Washington  had.  If  you  and  I  are  called  on  today  to 
do  in  industry  what  Washington  and  Lincoln  did  in  politics,  if 
you  and  I  are  called  upon  to  be  the  Washingtons  and  Lincolns 
of  industry,  are  we  the  men  to  do  it?  That  is  the  question. 

I  say:  "Yes,  I  am  the  man."  It  isn't  modest,  but  I  say: 
"Yes,  come  on  with  me,  because  you  are  the  man — you  are  the 
man  to  bring  about  this  reconstruction  of  our  America  and 
make  it  what  it  can  be;  make  it  fit  the  ideas  that  we  have  in 
our  heads  and  hearts."  No  dispensation  from  the  great  Crea- 
tor will  make  America;  it  is  done  through  His  regularly  ap- 
pointed agents — humanity,  mankind,  you  and  I,  my  American 
brothers  and  sisters.  Through  you  and  I  this  blessing  will 
come  to  this  country  or  not  at  all. 

Are  You  the  Man? 

Are  you  the  man  to  help  bring  about  America's  principles 
and  establish  them  throughout  this  country  in  the  daily  con- 
duct of  our  lives,  that  men  from  foreign  nations  and  many  who 
have  been  born  here  will — maybe  for  the  first  time — realize 
what  America  stands  for  and  why  that  flag  is  honored? 
[Applause.] 

When  a  man  invents  or  discovers,  that  is  only  uncovering  a 
thing  that  he  calls  new.  We  find  that  there  is  nothing  new,  but 
there  is  something  new  to  our  observation.  Our  observation 
may  see  it  for  the  first  time.  Steam  was  not  new  when  Fulton 
applied  it  to  the  operation  of  a  steamboat. 

Fulton  took  it  over  to  Napoleon  when  France  wanted  to  be 
the  "king  pin"  of  the  world,  and  Napoleon,  the  great  general, 
listened  to  his  story  and  turned  him  down,  because  it  was  only 
a  theory  to  him.  If  Napoleon  had  been  broad  enough  of  vision, 
if  Napoleon  had  been  capable  of  seeing  a  new  thing,  a  new 
power,  the  map  of  Europe  would  have  been  changed,  but 
Napoleon  did  not  see  it. 


496         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

George  Westinghouse,  with  his  new  air  brake,  went  into 
Vanderbilt's  office  in  New  York  and  showed  him  his  "toy,"  and 
Vanderbilt  listened  for  a  while  and  then  said :  "What,  do  you 
mean  to  tell  me  that  you  are  going  to  stop  a  train  weighing 
hundreds  of  tons  with  wind?  There  is  the  door."  Westing- 
house  walked  out  and  Vanderbilt  did  not  get  the  air  brake. 

When  a  man,  whose  name  we  know  well  now,  first  monkeyed 
with  a  little  power  that  we  are  all  familiar  with  now,  he  was 
just  flying  a  kite  and  I  presume,  of  course,  it  must  have  been 
raining  because  the  string  had  to  be  wet  to  conduct  that  cur- 
rent down  to  the  key  that  was  near  his  hand,  and  he  got  the 
little  shock.  He  did  not  see  electricity. 

Fulton  did  not  see  steam.  No  man  has  ever  seen  power  in 
any  form.  We  can  see  the  vapor  that  steam  makes  when  it 
strikes  the  air;  we  can  see  the  result  of  electricity  in  action, 
such  as  this  light,  but  we  do  not  see  electricity.  We  can  see 
our  electric  street  cars  run,  but  we  do  not  see  the  power. 

A  New  Power  at  Work 

You  and  I  are  going  to  see  something  now,  but  don't  point 
to  that  door,  because  I  am  not  going  through  it  until  I  get 
ready.  But  I  am  going  to  tell  you  about  a  new  power,  and  I 
am  going  to  take  it  out  of  our  churches  that  have  had  it  tied 
up  there  and  offering  it  freely  to  the  people,  but  tied  it  up  in 
our  churches  and  bound  it  up  with  stone  and  brick  walls,  where 
it  has  been  used  only  to  preach  about  for  a  few  hours  on  Sun- 
day. Now  you  business  men  and  we  practical  fellows  have  to 
dig  that  thing  up  and  yank  it  into  business.  Listen — it  is 
spiritual  power.  [Applause.] 

I  have  spoken  to  thousands,  yes,  hundred  of  thousands  of 
laboring  men.  I  have  spoken  to  thousands  of  business  men, 
and  I  know,  while  I  have  not  seen  spiritual  power,  I  have  seen 
it  at  work.  An  illustration — I  could  give  you  lots  of  them : 

At  the  Sydney  Bloomingthal  plant  in  Shelton,  Conn. — 
where  they  make  velvets  and  velours,  not  a  war  product,  not 
munitions  (munitions  were  made  within  15  miles  from  there 
at  a  high  competitive  point  where  they  were  paying  big  prices 
for  labor) — Sydney  BloomingthaPs  plant  had  a  waiting  list 
through  the  war.  They  had  an  industrial  democracy;  they 
were  working  in  co-operation,  and  they,  in  spite  of  the  23  Ian- 


INDUSTRIAL  DEMOCRACY  497 

guages  spoken  in  that  plant,  had  at  least  a  few  glimmers  of 
what  democracy  meant. 

They  had  saved  hundreds  of  thousands  of  dollars  by  that 
co-operative  spirit,  hundreds  of  thousands  of  those  things  that 
we  go  into  business  for.  So  co-operative  spirit  in  capital  and 
labor  pays  in  money,  and  anything  that  is  good  pays  all  around, 
and  the  "gooder"  it  is  the  better  it  pays.  If  it  is  sound,  if  it  is 
right,  if  it  is  true,  it  pays ;  and  it  pays  to  co-operate  with  men 
and  it  pays  to  develop  men. 

In  that  plant  in  October,  1918,  23  languages  were  spoken. 
They  had  taken  $26,000  in  the  First  Liberty  Loan.  They  had 
taken  $33,000  in  the  Second  Liberty  Loan.  They  had  taken 
$65,000  in  the  Third  Liberty  Loan  and  they  had  taken  one 
hundred  and  twenty-odd  thousand  dollars  in  the  Fourth  Liberty 
Loan. 

What  Democracy  Did 

In  their  House  of  Representatives  a  man  got  up  in  October, 
1918,  and  said:  "The  boys  are  talking  around  through  the 
plant  that  they  would  like  to  have  some  plan  of  paying  up  their 
subscriptions  on  the  Fourth  Liberty  Loan  a  little  quicker  than 
we  are  now,  and  it  has  been  suggested  and  talked  about  that 
we  work  an  extra  hour  each  day.  Instead  of  closing  the  plant 
at  5  o'clock,  we  will  begin  and  work  until  6  o'clock,  if  the  Com- 
pany will  apply  that  extra  hour's  wages  to  the  payment  on  the 
Fourth  Liberty  Loan."  They  wanted  to  be  ready  for  the  Fifth 
Liberty  Loan  that  they  thought  was  coming.  [Applause.] 

I  am  going  to  show  you  what  spiritual  power  means.  That 
isn't  it;  it  is  only  pointing  that  way.  Well,  the  motion  was 
made  and  carried.  Of  course,  that  did  not  make  the  law,  be- 
cause it  has  to  pass  the  Senate  and  has  to  pass  the  Cabinet,  but 
you  could  bank  upon  it  that  that  law  would  go  through.  You 
can  pass  all  kinds  of  laws  that  are  right. 

Well,  the  next  man  got  up  and  said :  "I  move  that  at  5  o'clock 
the  whistle  be  blown  and  that  every  man  and  woman  stop  work 
for  that  one  minute,  just  preceding  this  contribution  that  we 
are  making  to  the  greatest  cause  the  world  has  ever  had." 
They  made  that  motion,  seconded  it  and  voted  on  it  unani- 
mously that  they  stop  work  for  one  minute  while  the  whistle 
be  blown. 

Then  another  one  got  up  and  said :    "I  move  that  every  face 


498         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

be  turned  toward  the  east."  Mind  you,  all  of  this  among  the 
workers,  about  52  people  in  that  House  of  Representatives. 
So  it  was  voted,  too. 

Prayer  for  Victory 

I  was  there  a  few  weeks  later  and  a  man  got  up  and  said : 
"I  think  that  while  the  rest  of  us  know  it,  Mr.  Leitch  would  be 
glad  to  know  that  some  of  the  women  are  offering  up  a  prayer 
during  that  minute."  Another  fellow,  without  getting  up, 
said :  "Yes,  and  lots  of  the  men  are  doing  it,  too,  if  they  would 
only  own  up  to  it." 

Twenty-three  languages,  men  and  women  from  foreign 
nations,  unified  by  a  spirit,  the  spirit  of  freedom,  and  a  desire 
to  contribute  toward  that  spirit  of  freedom,  toward  a  just 
cause.  That  is  not  hands  at  work;  that  is  not  heads  at  work; 
that  is  something  that  puts  both  the  hand  and  the  head  at  work 
and  keeps  it  on  the  job — the  spirit  of  the  man. 

I  say  "put  into  business  spiritual  power."  I  say  that  you,  as 
executives,  have  it ;  it  cannot  be  new  to  you  even  to  hear  that 
statement.  You  know  it,  you  feel  it  inside  of  you.  It  is  that 
thing  that  makes  you  want  to  be — when  you  are  all  alone, 
maybe  pacing  your  room  at  home  or  sitting  down  quietly,  not 
smoking  your  cigar  or  your  pipe,  because  you  are  thinking  so 
hard  and  so  deeply  that  you  let  your  pipe  or  your  cigar  go  out, 
as  you  have  been  thinking  and  picturing  what  you  should  make 
of  yourself.  That  is  the  hope  that  you  have  in  yourself ;  that 
is  the  faith  that  you  have  in  yourself,  and  yours  is  the  spirit 
in  the  man  and  you  have  it. 

Believe  in  Yourselves 

Believe  in  your:  2lves.  Believe  in  your  organization,  because 
every  man  in  your  organization  also  has  that  spirit.  I  do  not 
care  whether  you  call  it  soul  or  call  it  ego ;  you  can  call  it  any- 
thing the  college  professors  call  it  or  you  can  leave  it  without 
a  name,  but  it  is  there.  It  is  the  invisible  man  oh  the  inside 
that  keeps  you  going  toward  the  front,  and  that  keeps  the 
working  man  going  toward  the  front.  He  is  not  as  well 
educated  as  you  and  I ;  he  cannot  express  himself  as  thoroughly 
as  you  and  I  can ;  he  is  trying  to  tell  you  and  he  is  hollering  all 
over  this  country:  "Won't  somebody  with  a  constructive 
thought  come  and  lead  us?"  And  we  have  not  heard  him. 


INDUSTRIAL  DEMOCRACY  499 

Labor  Weary  of  Destruction 

The  man  with  the  destructive  thought  has  stepped  in  and  he 
is  trying  to  lead  labor,  and  labor  is  saying  today :  "We  are 
tired  of  this  stuff ;  we  do  not  want  any  more  of  this  Bolshevism ; 
we  do  not  want  these  I.  W.  W.'s.  Deport  them.  Leave  America 
for  men  of  American  spirit."  And  we  do  not  hear  them  and 
we  let  the  foreigner  and  the  radical  and  the  Bolsheviki  and  the 
I.  W.  W.  lead  these  men. 

Get  to  a  point  where  you  can  be  as  wise  as  Solomon.  That 
is  what  we  need,  and  when  we  are  then  we  will  try,  like  he  did, 
and  we  will  say :  "Oh,  Lord,  give  me  wisdom  that  I  may  lead 
the  people  of  my  institution,  the  people  that  are  in  my  own 
organization,  whether  it  be  in  a  mine  or  mill  or  a  plant!" 
These,  the  climax  of  all  created  things,  made  by  the  Creator, 
put  into  our  hands  in  the  shape  of  raw  materials  from  the 
Almighty.  Let  us  help  Him  make  of  these  a  race  of  master 
men.  It  is  now  that  we  are  getting  the  opportunity.  Can  we 
understand  it?  That  is  our  job. 

Making  Finished  Product  of  Men 

Our  job  is  not  making  ore  or  a  finished  product  of  metals. 
It  is  making  a  finished  product  of  our  organization.  It  is 
making  master  manhood.  Get  on  the  job,  the  biggest  job  that 
you  have;  come  on  and  get  on  the  job.  We  need  it  as  a  nation, 
we  need  it  as  a  world-leading  nation,  and  the  world  is  looking 
to  America  for  the  leadership  in  industry,  which  means  the 
leadership  in  manhood,  for  without  it  there  cannot  be  leader- 
ship in  industry.  [Applause.] 

I  want  to  tell  you  one  story,  and  then  I  am  going  to  quit.  I 
hope  I  have  sold  to  you  your  organization.  Go  back  and  take  a 
look  at  them,  and  don't  look  at  the  face ;  don't  be  fooled  by  the 
grime  that  may  be  on  those  skins  that  cover  flesh  and  bone; 
look  back  of  that;  open  up  your  inside  eyes  and  see  the  inside 
of  the  men  before  you.  Back  in  there  you  will  see  unlimited 
possibilities,  untapped  reservoirs,  things  that  will  make  profits 
in  your  business.  Yes,  things  that  will  make  better  goods 
whatever  you  are  making,  things  that  will  save  your  powder, 
your  tools,  your  chains,  your  cars,  your  equipment,  whatever 
it  may  be,  if  you  will  get  that  inner  man  active — but  first  you'll 
have  to  see  him. 


500         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  is  profitable  from  a  financial  standpoint ;  it  is  a  good  thing 
from  an  economic  point  of  view.  Some  of  you  may  not  like 
this,  but  I  am  going  to  tell  you  anyhow — that  it  is  profitable 
from  a  spiritual  point  of  view.  [Applause.] 

I  am  very  selfish;  I  am  greedy;  I  want  plenty  of  money  to 
take  care  of  my  wife  and  my  daughter,  my  daughter's  husband, 
if  he  happens  to  need  it,  which  he  won't,  and  their  children,  if 
they  happen  to  need  it,  and  I  do  not  believe  they  will,  because 
I  believe  in  my  daughter  and  my  son-in-law,  but  I  want  enough 
money  to  take  care  of  them  in  case  anything  happens.  Oh, 
yes,  I  am  greedy !  I  want  it  and  I  can't  get  it  unless  I  earn  it. 

I  want  the  friendship  of  thousands  of  men,  I  want  their 
faith,  I  want  their  confidence,  I  want  their  love.  I  am  going 
to  get  it,  and  I  am  not  going  to  die  without  it.  Money — there 
isn't  enough  in  the  world  to  pay  me  what  I  want.  I  want  men 
and  I  want  the  brotherhood  of  man.  I  want  it  established 
while  I  live,  and  I  want  to  help  build  it  myself  and  the  builder 
will  get  all  the  credit  that  is  coming  to  him. 

I  am  greedy  for  you  that  you  get  those  same  things,  too,  that 
the  world  may  not  pay  you  in  money  alone.  I  pray  that  you  do 
things  that  checks  cannot  square  accounts  with  you,  except 
the  checks  that  are  issued  in  some  place  we  know  not  where, 
but  maybe  instead  of  there  it  is  right  in  our  hearts  where  those 
books  are  kept,  and  it  will  bring  you  happiness  and  content- 
ment, and  that  is  what  you  are  after,  and  that  is  what  I  am 
after.  I  want  you  to  get  that  as  well  as  the  money,  and  I  am 
telling  you  how  you  can  get  it. 

The  Job  of  Building  Men 

Get  on  the  job  that  the  Creator  had,  a  job  of  building  men. 
If  you  will  help  Him,  He  will  help  you.  I  am  not  talking 
Sunday-school  talk,  either;  I  am  talking  practical  stuff,  and 
when  you  get  the  Creator  co-operating  with  you  you  cannot 
lose.  I  say  you  are  building  with — and  it  is  a  wonderful  thing 
to  do — spiritual  power.  I  am  showing  to  you,  maybe,  a  ship 
that  is  not  dependent  upon  the  wind,  and  I  ask  you,  for  your 
sake,  not  to  turn  it  down  as  Napoleon  did. 

I  am  telling  you  to  use  spiritual  power ;  it  lies  in  your  place, 
in  yourself,  and  when  you  get  it  you  will  have  what  the  French 
call  "esprit  de  corps" — spirit  of  the  organization.  We  have 


INDUSTRIAL  DEMOCRACY  501 

used  the  expression  with  our  mouths  and  have  made  noises 
with  the  tongue,  but  it  has  not  meant  anything  down  in  our 
hearts,  and  there  is  a  spirit  in  the  organization,  raw  material 
so  far,  waiting  for  you  to  build  up. 

One  story,  if  I  may:  A  certain  man,  a  great  big  general, 
next  to  the  king,  because  he  was  a  wonderful  fighter  and  had 
conquered  many  enemies  and  brought  home  many  slaves,  had 
leprosy.  Among  the  slaves  he  had  brought  to  his  own  country 
from  other  lands  was  a  little  girl  who  was  a  servant  to  his 
wife.  The  little  girl  liked  this  general,  and  one  day  she  said  to 
Mrs.  Naaman :  "Would  that  my  lord  Naaman  lived  in  Samaria, 
where  lives  a  prophet  who  would  cure  him !"  So  he  made  the 
trip,  and  with  him  he  took  camels  and  presents  of  different 
kinds  to  the  great  man  who  was  going  to  cure  him  of  that 
leprosy. 

He  arrived  not  at  some  great  mansion  or  a  king's  palace, 
but  at  the  home  of  a  modest  man.  The  great  doctor  did  not 
come  out  to  meet  Naaman,  the  great  general,  but  a  servant 
was  sent  out  to  this  great  general  of  a  country  that  had  con- 
quered the  country  in  which  the  doctor  lived.  The  servant 
said  to  Naaman:  "Go  and  bathe  in  the  river  Jordan  seven 
times,  and  thy  flesh  shall  return  to  thee  as  that  of  a  little  child." 

Naaman,  seeing  this  little  Jordan,  a  muddy  stream  dried  up 
part  of  the  year,  and  thinking  of  the  great  rivers  of  his  own 
country,  said :  "That  I  should  bathe  in  this  little  stream !  Are 
there  not  rivers  in  Damascus  in  which  I  may  bathe  and  be 
clean."  And  he  turned  in  rage  and  headed  back  to  his  country. 
He  was  insulted  twice — approached  by  a  servant  and  told  to 
bathe  in  a  muddy  stream. 

One  of  his  servants  came  and  said :  "My  master,  if  he  had 
asked  you  to  do  some  great  thing,  would  thou  not  have  done 
it?"  And  Naaman  turned  back  and  he  bathed  in  the  Jordan 
seven  times.  The  story  says  that  his  flesh  returned  to  him  as 
that  of  a  little  child,  re-born. 

A  True  Story  Today 

In  the  language  of  the  ancients,  seven  times  meant  "make  a 
complete  job  of  it,"  and  Naaman  immersed  himself  in  that  little 
stream  and  he  made  a  complete  job  of  it.  I  do  not  care  whether 
there  ever  was  a  Jordan,  and  if  the  scientists  could  prove  to 


502         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

me  there  never  was  a  Naaman,  nor  a  Persia,  nor  an  Israel,  and 
if  they  can  prove  that  there  was  no  such  time  in  history,  still 
they  have  taken  not  one  particle  from  the  truth  of  the  story. 
The  story  is  true  and  it  was  told  for  you  and  me  here  today 
in  St.  Louis,  and  you  are  going  to  take  it  away  with  you.  You 
and  I  are  Naamans. 

We  are  not  the  full-sized,  100  per  cent.  man.  We  have  some 
defects,  and  to  cure  those  defects  and  become  first-class,  "a 
number  one,"  high-grade,  100  per  cent,  men,  we  have  to  bathe, 
immerse  ourselves  in  the  duty  that  lies  right  before  us  every 
day,  and  not  wait  for  some  far-off,  distant,  great  thing  to  do, 
like  a  great  river  of  Damascus  in  which  we  might  bathe ;  but 
the  job  that  comes  before  us  each  day  is  the  place  where  we  are 
going  to  bathe,  or  we  will  not  be  a  100  per  cent.  man. 

Men  Are  Calling 

Go  and  immerse  yourselves  in  the  duty  of  today,  and  do  not 
wait  for  some  great  deed  or  some  great  man  to  call  upon  you. 
Men  are  calling  upon  you  now.  Maybe  you  think  it  isn't  a  big 
enough  job  for  you.  Well,  it  is ;  it  is  big  enough  for  all  of  you, 
for  all  you  are  now,  and  for  all  you  ever  hope  to  be,  and  if 
you  don't  do  it — well,  you  haven't  been  cured  and  you  are  not 
going  to  be  that  man  that  in  your  heart  you  want  to  be,  unless 
you  immerse  yourself  in  the  duty  of  the  day  and  put  the  whole 
man  on  the  job.  Pretty  high  aims? 

It  makes  me  think  of  a  piece  of  poetry  with  only  a  few  lines 
to  it,  and  then  I  am  going  to  leave  you.  Ella  Wheeler  Wilcox 
wrote  it.  I  do  not  know  the  title  and  I  do  not  know  the  last 
two  verses,  but  I  do  know  the  first  one  and  you  are  going  to 
know  it  now : 

"I  may  not  reach  the  heights  I  seek, 

My  untold  strength  may  fail  me; 
Or,  half  way  up  the  mountain  peak, 

Fierce  tempests  may  assail  me. 
But  though  that  place  I  never  gain, 
Herein  lies  pleasure  for  the  pain — 

I  shall  be  worthy  of  it." 

That  is  your  standard  now  as  well  as  mine.     [Applause.] 


LABOR  AND  ITS  RESPONSIBILITIES  503 

\ 
LABOR  AND  ITS  RESPONSIBILITIES 

Address  by  CHARLES  PIEZ,  of  Chicago,  111. 

On  November  9,  fully  conscious  that  the  bituminous  coal 
miners  had  declined  to  submit  to  the  arbitration  offered  by  the 
President,  a  series  of  demands  which  were  so  extravagant  that 
they  would  have  imposed  on  the  consuming  public  a  burden  of, 
at  least,  a  billion  dollars  a  year,  the  Executive  Council  of  the 
American  Federation  of  Labor,  after  a  four-hour  session, 
pledged  to  the  United  Mine  Workers  the  full  moral  and  finan- 
cial support  of  its  4,000,000  members  in  the  bituminous  coal 
strike  which  the  Government,  through  Judge  Anderson  in  the 
Federal  Court  at  Indianapolis,  had  declared  unlawful.  In  com- 
menting on  this  action,  one  of  the  labor  executives  said  that 
same  evening:  "This  means  that  the  strike  order  will  not  be 
rescinded.  The  time  has  come  when  the  people  of  the  United 
States  should  find  out  once  and  for  all  if  its  Government  has 
the  power  to  make  men  work  against  their  will."  If  this  were 
the  outburst  of  some  splenetic  business  agent  it  would  not 
deserve  mention,  but  when  it  represents  the  views  of  conserva- 
tive labor  leaders  it  is  apparent  that  the  error  in  the  conception 
of  the  real  situation  is  epidemic,  rather  than  sporadic. 

It  is  difficult  to  believe  that  such  experienced  and  astute 
leaders  as  Mr.  Gompers  and  his  colleagues  should  really  feel 
that  the  action  of  the  Government  in  Indianapolis  meant  a 
return  to  involuntary  servitude  for  the  workers.  If  they  do, 
then  labor  is  under  a  most  peculiar  and  unwholesome  delusion 
as  to  its  rights  and  privileges,  and  the  organization  which  has 
recorded  itself  against  oppression  of  every  kind  has  itself 
become  a  most  inconsiderate  and  merciless  oppressor  of  the 
general  public. 

Labor  Strengthened  by  War 

At  this  time  organized  labor  is  stronger  in  membership  and 
stronger  in  solidarity  than  ever  before  in  its  history.  It  is 
no  longer  a  suppliant  for  popular  sympathy  in  its  struggle  for 
recognition.  It  works  short  hours,  receives  high  pay,  and  has 
unlimited  opportunity  for  employment.  It  has  attained  these 


504         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

exceptional  advantages  so  quickly  and  so  easily,  through  the 
extraordinary  conditions  attendant  upon  the  war,  that  it  has 
armed  itself  with  a  bludgeon  and  is  preparing  to  beat  its  way 
to  the  full  and  exclusive  possession  of  the  fleshpots  of  estab- 
lished industry. 

There  is  evident  in  its  methods  and  its  aims  none  of  the 
care  and  consideration  that  should  attend  the  exercise  of  great 
power.  It  has  thrown  caution  to  the  winds,  and  is  prepared  to 
wreck  the  State  itself  in  its  blind  intent  to  follow  the  course 
laid  by  radicalism.  Neither  want  nor  economic  necessity  can 
be  urged  as  the  cause  of  the  epidemic  of  strikes  from  which 
we  are  at  present  suffering.  They  result,  without  doubt,  from 
carefully  laid  plans  to  create  discontent  and  to  develop  sus- 
picion and  class  hatred.  So  skillfully  and  methodically  have 
these  plans  been  laid,  so  adroitly  have  revolutionary  leaders 
worked  from  the  inside  of  the  American  Federation  of  Labor, 
that  even  its  conservative  executives  are  today,  in  their  desire 
to  compromise  with  radicalism  and  maintain  the  integrity  of 
the  Federation,  giving  countenance  to  methods  and  doctrines 
which,  if  tolerated,  will  subvert  the  very  foundations  of  our 
economic  and  social  structure. 

I  came  in  frequent  contact  with  Mr.  Gompers  and  his  asso- 
ciates during  my  connection  with  the  Emergency  Fleet  Cor- 
poration, and  I  found  nowhere  more  patriotic  and  earnest 
co-operation  to  keep  the  industries  going  without  interruption 
during  the  national  crisis.  I  feel  free  to  say,  therefore,  that  I 
believe  Mr.  Gompers  and  his  associates  are  unaware  of  the 
menace  and  dangers  of  the  course  that  has  been  laid  for  them. 
Radicalism  decided  on  its  policy  to  bore  from  within  the  Ameri- 
can Federation  of  Labor  some  years  ago,  and  no  effective  steps 
were  taken  by  the  leaders  of  the  Federation  to  prevent  this 
honeycombing.  Constant  compromise  may  build  up  a  large 
association,  but  it  takes  courage  and  unswerving  fidelity  to 
principle  to  build  up  a  strong  and  effective  organization. 

The  executives  of  the  American  Federation  of  Labor  have 
yielded  too  much  to  the  desire  for  numbers,  and  they  have 
before  them  a  large  job  of  housecleaning  to  re-establish  them- 
selves in  the  public  confidence.  They  have  missed  several 
opportunities  within  the  last  12  months  to  show  that,  in  their 
growing  strength  and  increasing  power,  they  were  still  mindful 
of  their  obligations  to  the  public. 


LABOR  AND  ITS  RESPONSIBILITIES  505 

Federation  Lost  Opportunity 

When  the  Metal  Trades  Council  of  the  Puget  Sound  District 
called  a  strike  last  January  in  defiance  of  an  existing  and  unex- 
pired  agreement  entered  into  between  the  Federation  and  the 
Government,  its  members  should  have  been  ordered  back  to 
work  by  the  international  presidents  of  the  crafts  involved, 
and  failure  to  comply  with  this  order  should  have  resulted  in  a 
withdrawal  of  the  charters.  But  the  officers  of  the  Federation 
contented  themselves  with  being  sympathetic  with  the  Govern- 
ment's efforts  to  enforce  a  labor  contract  and  lost  a  golden 
opportunity  to  put  themselves  sternly  and  uncompromisingly 
on  record  against  a  breach  of  agreement,  and  against  the  radi- 
cal element  in  its  membership  that  was  guilty  of  so  violent 
a  disregard  of  common  business  honesty. 

Again,  the  Federation  should  have  appreciated  the  difference 
in  obligation  between  a  policeman  sworn  to  protect  the  life 
and  property  of  the  public,  and  a  workman  engaged  in  manu- 
facturing. It  should  have  set  itself  squarely  against  a  strike 
of  policemen,  under  any  and  all  circumstances,  and  should  have 
advocated  other  ways  to  redress  wrongs,  if  wrongs  existed. 

And  in  the  steel  strike  the  American  Federation  of  Labor 
gave  its  countenance  and  support  to  Foster,  an  avowed  syn- 
dicalist and  revolutionist,  a  man  who  had  disseminated  among 
our  alien  workmen  principles  wholly  at  variance  with  Ameri- 
can institutions.  Why  should  the  American  Federation  of 
Labor  lend  its  encouragement  and  aid  to  an  organizer  who 
has  publicly  announced  that  "the  wages  system  is  the  most 
brazen  and  gigantic  robbery  ever  perpetrated  since  the  world 
began" ;  that  "the  syndicalist  allows  no  consideration  of  loyalty, 
religion,  patriotism,  honor  or  duty  to  stand  in  the  way  of  his 
adoption  of  effective  tactics"? 

Does  not  the  American  Federation  of  Labor  surrender  its 
vaunted  position  of  conservatism  and  loyalty  to  American  insti- 
tutions when  it  employs  exponents  of  such  doctrines  in  its 
campaign  for  new  members? 

Compromising  with  Radicals 

Can  there  be  any  question  that  even  the  conservatives 
among  our  labor  leaders  are  tolerating  the  specious  arguments 
and  false  promises  of  the  extremists  in  the  labor  group,  and 


506         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

that  in  facing  the  situation  today  and  in  looking  for  a  remedy 
we  must  appreciate  that  the  radicals  in  the  Federation,  though 
I  believe  in  the  minority,  have  temporarily  raised  the  red  flag 
above  the  red,  white  and  blue  ? 

Conservative,  sane  leaders  of  the  Federation  must  either 
declare  themselves  in  favor  of  radical  doctrines  and  action  or 
they  must  have  courage  to  assert  themselves,  to  re-establish 
for  the  organization  the  groundwork  of  American  principles 
and  ideals,  even  if  that  re-establishment  should  split  the  Fed- 
eration. The  public  is  going  to  insist  that  it  be  no  longer  vic- 
timized by  men  who  intend  to  control  industry  and  society 
through  a  framework  of  Soviets,  and  it  is  not  going  to  submit 
to  constant  interruption  of  the  vital  industrial  processes  when 
revolutionary  propaganda,  and  not  economic  necessity  or  want, 
is  the  cause  of  the  interruption.  The  public  is  insufficiently 
organized  for  promptly  and  effectively  meeting  a  situation  like 
the  present,  but  it  can  insist  in  no  uncertain  way  that  its 
legislators  and  its  representatives  bear  in  mind  that  obliga- 
tions, as  well  as  privileges,  go  with  American  citizenship,  that 
this  is  a  government  by  majorities,  and  that  no  organized 
minority  will  for  any  length  of  time  be  permitted  to  prey 
without  hindrance  on  the  majority.  France  has,  in  the  national 
elections  just  held,  declared  herself  overwhelmingly  against 
radicalism,  and  America  will  declare  herself  similarly  when 
the  opportunity  comes.  For  our  people  are  just  beginning  to 
understand  and  appreciate  the  reason  for  the  existing  unrest 
and  sinister  purpose  of  the  leaders  who  are  fomenting  it.  They 
are  growing  more  critical  of  the  aliens  who  have  sought  our 
shores ;  they  insist  on  knowing  whether  these  aliens  have  come 
here  to  seek  a  livelihood  in  the  American  way  under  American 
institutions,  or  whether  they  propose  to  enforce  upon  us  a 
new  form  of  government,  born  of  immature  and  visionary 
minds  amid  the  stress  and  discouragement  of  foreign  oppres- 
sion. 

Suitable  Laws  Needed 

Congress  will,  without  question,  meet  this  present  invasion 
of  irrationalism  and  revolutionary  propaganda  by  suitable  laws 
that  will  enable  the  Department  of  Justice  to  deport  aliens 
who  are  unwilling  to  accept  the  American  principles  of  govern- 


LABOR  AND  ITS  RESPONSIBILITIES  507 

ment,  or  who  are  guilty  of  slanderous  misrepresentation  of  our 
institutions.  We  want  men  of  foreign  birth,  men  who  will 
adopt  our  principles  of  government  and  assist  in  improving 
them,  but  we  want  no  unassimilated  foreign  element  to  become 
a  cancer  spot  to  our  institutions  in  the  future.  We  are  going 
to  handpick  our  immigrants  hereafter  and  we  are  going  to 
return  some  troublesome  examples  that  have  sought  our 
shores.  That  will  be  the  first  step  in  our  return  to  sanity. 

The  second  step  should  consist  in  impressing  on  the  sane 
leaders  of  labor  the  necessity  of  getting  a  proper  conception  of 
what  wages  are  and  who  pays  them.  Among  the  many  eco- 
nomic delusions  of  the  day  is  the  one  that  capital  pays  wages 
and  that  high  wages  can  be  paid  out  of  profits  and  surplus,  or 
out  of  capital  itself  without  increasing  output  or  advancing 
prices.  Not  only  workmen,  but  many  of  our  legislators,  forget 
that  capital,  as  applied  to  the  industries,  represents  investment 
in  property,  in  machinery  and  equipment,  and  in  material  in 
process  of  manufacture,  and  that  the  way  to  meet  wages,  the 
cost  of  materials,  of  power,  and  all  the  other  expenses  involved 
in  manufacture  must  be  secured  out  of  the  selling  price  of  the 
product,  out  of  the  money  derived  from  the  user  or  consumer. 

Wage-Earners  Pay  Bill 

If  wages  increase  and  production  falls,  an  almost  universal 
industrial  occurrence  at  this  time,  prices  must  go  up,  not  only 
to  meet  the  increased  wage,  but  also  in  proportion  to  the 
decreased  output.  Wage-earners  are  apt  to  forget  that  they 
are  themselves  the  largest  consumers  of  manufactured  com- 
modities and  that  they  must,  therefore,  pay  by  far  the  largest 
share  of  any  increase  in  the  cost  of  production.  If  any  group 
or  class,  like  the  bituminous  coal  miners,  for  instance,  attempts, 
under  some  wrong  economic  theory,  to  improve  the  oppor- 
tunity for  labor  by  reducing  output  and  at  the  same  time 
insists  on  an  increase  in  wages,  the  burden  falls  most  heavily 
on  other  groups  of  wage-earners,  who  must  retaliate  in  some 
equivalent  form  to  restore  the  economic  balance. 

So  much  has  been  said  of  the  necessity  of  increasing  pro- 
duction and  reducing  consumption  to  bring  down  the  cost  of 
living  that  further  repetition  seems  unnecessary.  But  this 
economic  axiom  is  not  yet  admitted  by  labor  leaders  to  indi- 


508         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

cate  the  right  policy,  and  constant  reiteration  is,  therefore, 
essential  to  insure  its  wider  acceptance. 

It  is  well  to  remember  that  the  disinclination  of  labor  leaders 
to  accept  this  basic  truth  is  by  no  means  due  to  lack  of  intelli- 
gence on  their  part,  but  is  due  rather  to  the  fact  that  for 
years  organized  labor,  both  here  and  abroad,  has  endeavored 
to  improve  its  condition  by  keeping  demand  in  excess  of  the 
normal  supply.  Labor  adopted,  in  other  words,  the  principles 
of  monopoly  and  such  measures  as  the  limitation  of  the  num- 
ber of  apprentices,  the  consistent  opposition  to  any  scheme  of 
wage  payment  that  would  tend  to  stimulate  output,  and  the 
restriction  of  the  output  of  the  individual  to  the  capacity  of 
the  least  skilled  naturally  resulted.  Without  questioning  the 
wisdom  of  this  labor  policy  in  the  past,  it  is  proper  to  indicate 
that  under  conditions  as  they  obtain  today,  and  as  they  are 
likely  to  obtain  during  the  next  few  years,  a  continuation  of 
this  policy  is  destructive  of  the  best  interests  of  labor  itself. 
Restriction  of  output  may  appear  wise  during  periods  of  re- 
duced consumption ;  it  is  never  wise  during  periods  of  unlimited 
demand.  There  is  no  possible  hope  that  the  vastly  reduced 
productive  processes  of  the  world  can  meet  the  normal  demand 
and  make  good  the  ravages  of  the  war  in  years  to  come ;  and 
labor's  present  opportunity  lies  in  securing  high  wages  for 
large  production,  so  that  earnings  will  increase  faster  than  the 
cost  of  commodities  and  faster,  therefore,  than  the  cost  of 
living. 

The  third  and  final  step  to  meet  the  present  situation  is  to 
insure,  that  large  unincorporated  associations  of  either  employ- 
ers or  employes  be  brought  within  the  reach  of  civil  process  in 
every  jurisdiction.  These  organizations,  with  their  vast  mem- 
bership and  their  great  defense  funds,  are  in  position  to  do 
infinite  harm  to  the  public  without  accepting  any  responsibility 
for  the  acts  of  either  their  individual  members  or  their  leaders. 
For  the  past  25  years  labor  organizations,  particularly,  have 
been  exempted  from  every  piece  of  legislation  that  has  been 
enacted  to  safeguard  the  public  against  the  aggression  and 
extortion  of  combinations. 


LABOR  AND  ITS  RESPONSIBILITIES  509 

Should  Be  Under  Law 

When  associations  grow  as  powerful  as  these  labor  organiza- 
tions have  grown  in  the  past  few  years  the  only  protection 
against  irresponsible  action  lies  in  bringing  them  within  the 
law.  It  has  been  suggested  that  this  can  be  brought  about 
by  enacting  a  law  which  will  provide  that  any  voluntary  asso- 
ciation of  seven  or  more  members  may  sue  or  be  sued  in  the 
name  of  the  association.  There  seems  to  be  no  good  reason 
why  such  an  act  should  not  exist  in  every  jurisdiction. 

The  Illinois  Manufacturers'  Association  months  ago  insisted 
that  some  provision  in  restraint  of  strikes  should  be  made  in 
pending  railroad  legislation,  and  such  a  provision  was  actually 
introduced  in  both  the  House  and  the  Senate  bill. 

As  you  will  remember,  however,  it  was  very  materially  modi- 
fied before  the  House  passed  its  measure.  I  think  it  is  essen- 
tial, if  we  are  going  to  insure  continuous  operation  of  the  roads 
in  the  future,  that  the  men  be  given  an  opportunity  to  have 
their  wages  determined  by  a  proper  tribunal,  but,  in  considera- 
tion of  that  provision  and  as  a  part  of  their  contract  of  hiring, 
they  be  forced  to  waive  the  right  to  combine  to  tie  up  the 
systems.  I  think  that  same  safeguard  should  be  extended  to 
the  basic  industries,  and  certainly  to  municipal,  state  and 
Federal  employes.  I  feel  that  we  have  treated  labor  organiza- 
tions as  something  apart.  We  have  coddled  them  during  their 
early  stages,  but  have  lost  our  perspective  in  regard  to  them. 
Labor  need  no  longer  be  coddled ;  it  ought  to  be  held  to  a  strict 
accountability  for  its  actions.  That,  after  all,  is  the  most 
essential  step  that  we  can  take  as  a  nation  to  bring  labor  back 
to  some  form  of  sanity. 

I  am  suggesting  here  three  steps  in  this  process  of  recovery. 

Compulsory  Arbitration 

A  second  piece  of  legislation  that  commends  itself  is  that 
contained  in  the  Cummins  bill  which  provides  for  compulsory 
arbitration  in  railroad  labor  disputes.  Because  continuous 
operation  of  the  transportation  systems  is  absolutely  vital  to 
the  very  life  of  the  nation,  no  group  of  men  whom  chance  has 
placed  in  the  employ  of  these  systems  should  have  the  right 
to  conspire  collectively  against  the  public  interest.  It  is  not 
necessary  to  forbid  a  man  to  quit  work  if  he  so  chooses,  but 


510         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

it  is  fair  and  just  that  men  engaged  in  an  employment  vital 
to  the  nation  shall  be  prevented  from  using  their  great  power 
in  combination  to  practice  extortion  on  the  public.  Proper 
tribunals  for  the  determination  of  wages  and  the  adjustment 
of  disputes  should  be  provided,  but  the  workers  on  these  sys- 
tems should,  in  consideration  of  the  establishment  of  such 
machinery  to  insure  fair  wages  and  just  treatment,  and  in 
consideration  of  the  paramount  interest  of  the  public,  waive 
their  right  to  strike. 

Necessary  Legislation 

A  further  piece  of  legislation  which  has  been  suggested  as 
a  possible  preventive  against  premature,  unfair  and  unneces- 
sary strikes,  but  one  which,  it  is  thought,  will  not  prevent 
strikes  when  they  are  necessary  as  a  last  resort  to  secure 
justice,  provides :  "It  shall  be  unlawful  for  any  person,  associa- 
tion or  corporation  willfully  to  induce,  aid  or  support  any 
strike,  lockout  or  other  kind  of  industrial  warfare — 

(a)  Of  employes  whose  terms  of  employment  are  fixed  by 
the  state  or  any  political  sub-division  thereof; 

(b)  In  violation  of  an  agreement,  or  for  conditions  of  em- 
ployment conflicting  with  any  agreement  between  an  employer 
and  his  employes,  or  an  employer  and  any  labor  union ; 

(c)  In  violation  of  any  arbitration  award,  or  for  conditions 
of  employment  conflicting  with  the  terms  thereof ; 

(d)  To  enforce  demands  where  the  party  against  whom  the 
demands  are  pending  is  willing  to  submit  such  demands  to 
arbitration  by  any  method  agreed  upon,  or  to  any  public 
agency  authorized  by  law  to  deal  with  such  matters ; 

(e)  Without  first  giving  the  parties  involved  a  reasonable 
opportunity  to  consider  and  act  upon  the  terms  sought  to  be 
enforced  thereby; 

(f)  Where  there  is  no  trade  dispute  involving  issues  of 
direct  benefit  to  the  parties  involved ; 

Provided,  however,  that  nothing  in  this  section  shall  be  con- 
strued to  forbid  the  mere  quitting  work  or  the  discharge  of 
employes. 

The  state  or  any  political  sub-division  thereof,  or  any  person, 
firm,  association  or  corporation,  when  injured  or  threatened 


LABOR  AND  ITS  RESPONSIBILITIES  611 

with  injury  by  anything  forbidden  in  this  act,  shall  be  entitled 
to  all  of  the  appropriate  civil  remedies  in  law  and  equity." 

This  bill  is  not  framed  with  the  intention  of  depriving  men 
of  the  right  to  strike  when  that  apepars  the  only  way  to  meet 
the  economic  pressure  exerted  by  the  employers,  but  it  is 
framed  with  the  purpose  of  instilling  into  the  mind  of  organ- 
ized labor  a  proper  sense  of  responsibility  for  acts  which  will 
cause  harm  or  damage  to  other  parties  involved  in  a  labor  con- 
troversy. The  bill  does  not  declare  any  acts  criminal,  nor  does 
it  impose  on  any  department  of  justice  the  burden  of  enforcing 
the  law.  It  simply  affords  the  persons  injured  by  such  for- 
bidden acts  an  opportunity  to  stay  the  injury  by  an  injunction, 
or  to  recover  damages  in  some  court  of  justice.  It  will,  if 
enacted,  assist  in  building  up  among  the  members  of  the  unions 
that  sense  of  responsibility  which  is  essential  to  the  proper 
conduct  of  union  affairs. 

If  industrial  strife  is  ever  to  be  brought  down  to  sane  limits, 
it  must  be  done  by  enforcing  responsibility.  No  single  class 
must  be  permitted  to  run  wild  beyond  the  reach  of  the  law. 
If  there  must  be  collective  action,  then  let  us  so  frame  our 
laws  that  there  will  be  collective  responsibility. 


512         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


PRESENT  CONDITION  OF  THE  GOLD-MINING  INDUSTRY 

By  GEORGE  E.  ROBERTS 
Vice-President,  City  National  Bank,  New  York 

I  acknowledge  the  invitation  to  make  an  address  before  The 
American  Mining  Congress  at  St.  Louis,  beginning  November 
17,  or  to  send  you  a  paper  upon  the  serious  situation  in  which 
the  gold-mining  industry  is  now  involved.  I  recognize  that  the 
state  of  that  industry  is  a  matter  of  public  concern,  and  doubt 
if  there  is  a  general  appreciation  of  the  fact. 

Gold  Obligations  Demand  Gold 

Gold  is  our  standard  of  value  and  the  money  of  bank  re- 
serves. The  entire  body  of  outstanding  indebtedness,  public 
and  private,  including  the  Liberty  Bonds  recently  issued,  is 
payable  in  gold  coin  of  the  present  weight  and  fineness.  The 
nearly  $10,000,000,000  of  loans  which  the  United  States  Gov- 
ernment has  made  in  the  last  two  and  one-half  years  to  foreign 
governments  are  payable  in  this  gold  coin.  The  outstanding 
indebtedness  of  nearly  the  entire  world  is  contracted  in  gold. 
Outside  of  Asia,  gold  is  still  recognized  everywhere  as  the  unit 
of  value  and  the  basis  of  monetary  systems,  although  in  many 
countries  the  stress  of  war  conditions  and  the  unbalanced  state 
of  trade  have  compelled  a  suspension  of  gold  payments.  All 
of  these  countries  regard  such  suspension  as  temporary,  and 
desire  to  get  back  upon  the  gold  basis  and  establish  their  cur- 
rencies in  fixed  relations  to  gold  at  the  earliest  possible  date. 

Maintenance  of  Universal  Gold  Standard 

The  gold  standard  the  world  over  was  reached  through  a 
gradual  process  of  evolution,  as  the  development  of  commerce 
and  financial  relations  made  it  more  and  more  important  that 
there  should  be  a  common  basis  of  values  and  that  fluctuations 
in  exchange  rates  should  be  reduced  to  the  narrowest  possible 
range.  The  present  chaotic  state  of  the  exchange  and  the 
obstruction  which  present  rates  offer  to  trade  illustrate  the 
services  of  a  universal  standard  of  value  in  the  form  of  a  trans- 


PRESENT  CONDITION  OF  GOLD-MINING  INDUSTRY         513 

portable  commodity,  which  can  actually  be  transferred  in  set- 
tlement of  international  balances. 

Criticisms  of  the  gold  standard  are  largely  silenced  in  the 
presence  of  the  disorder  which  has  resulted,  from  the  fact  that 
under  conditions  highly  abnormal  the  gold  standard  for  the 
time  being  is  partially  inoperative.  The  first  great  task  in 
financial  reconstruction  is  to  get  the  recognized  international 
standard  back  to  functioning  normally.  It  would  be  poor  policy 
to  add  to  the  confusion  by  attempting  to  introduce  new  and 
complicated  substitutes  at  this  time. 

Gold  Mining  Not  a  Casual  Industry 

It  is  fundamental  to  the  re-establishment  of  the  gold  stand- 
ard as  the  basis  of  world  intercourse  that  gold  mining  shall  go 
on  at  something  like  the  normal  rate.  This  requires  that  pros- 
pecting, exploration  and  development  shall  be  carried  on  con- 
tinually and  that  the  industry  shall  invite  investment  upon 
terms  fairly  competitive  with  other  industries.  Gold  mining 
under  modern  conditions  is  not  an  industry  into  which  or  from 
which  capital  can  readily  be  shifted.  It  takes  a  long  time  to 
find  and  develop  a  good  gold  mine.  It  is  not  a  casual  industry, 
which  can  be  suspended  and  resumed  without  serious  inter- 
ference with  the  volume  of  production.  A  considerable  portion 
of  the  output  always  is  obtained  on  a  small  margin  of  profit, 
and  if  such  operations  are  suspended  and  the  mines  fill  with 
water,  they  are  likely  to  be  abandoned  permanently. 

The  Failing  Gold  Production 

It  is  well  known  that  the  gold-mining  industry  all  over  the 
world  has  been  affected  very  seriously  by  the  rising  costs  of 
the  last  few  years,  and  this  is  especially  so  of  gold  mining  in 
the  United  States  for  several  reasons.  Wages  have  not  risen 
as  much  in  South  Africa  and  some  other  countries  where  native 
labor  is  mainly  employed  as  in  this  country.  Moreover,  the 
South  African  operators,  instead  of  being  required  to  sell  their4 
product  at  the  Royal  Mint  or  Bank  of  England  at  the  coinage 
rate,  as  during  the  war,  are  now  allowed  to  dispose  of  it  as  they 
please,  and  they  are  able  to  take  advantage  of  the  high  ex- 
change rates  prevailing  and  thus  obtain  a  premium,  which  at 
present  amounts  to  10  per  cent,  or  better  over  the  mint  price. 


S14         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  United  States  is  almost  the  only  gold-producing  country  in 
which  the  producers  are  not  able  to  obtain  a  premium  above  the 
mint  price. 

In  the  United  States  the  producers  of  gold  have  had  to  com- 
pete with  the  demand  for  labor  in  copper  and  coal  mines  and  in 
other  industries,  and  pay  the  high  prices  prevailing  for  all  the 
supplies  required  in  mining  operations,  and  they  have  been 
unable  to  realize  any  more  than  the  fixed  coinage  value  for 
gold — $20.67  per  line  ounce.  They  have  had  no  compensation 
for  the  rising  costs,  and  as  operations  have  become  to  a  great 
extent  unprofitable,  production  is  failing  rapidly.  It  declined 
from  $101,035,700  in  1915  to  $68,646,700  in  1918,  and  compe- 
tent authorities  estimate  that  it  will  not  exceed  $55,000,000  this 
year.  It  certainly  will  continue  to  decline  unless  conditions 
change. 

Increased  Gold  Consumption  in  Arts  and  Trades 

On  the  other  hand,  the  mania  for  free  buying  and  high  living 
through  which  we  are  passing  causes  a  larger  consumption  of 
gold  in  manufactures  than  ever  before  known.  The  United 
States  Mint  service  is  the  principal  source  of  supply  of  gold 
bullion  for  manufacturers,  as  it  prepares  fine  bars  in  suitable 
sizes  for  the  purpose.  For  the  year  1914  the  Director  of  the 
Mint  estimated  the  total  consumption  of  gold  in  the  arts  in  this 
country  at  $45,520,018.  Sales  of  bullion  to  this  time  (Novem- 
ber 15,  1919)  indicate  that  for  1919  the  consumption  will  be 
nearly  if  not  quite  $65,000,000,  exceeding  by  $5,000,000  to 
$10,000,000  the  production  of  gold  from  the  mines. 

Gold  the  Limitation  of  Credit 

When  it  is  considered  that  gold  is  the  money  of  bank  re- 
serves, and  the  basis  of  bank  credit,  it  will  be  realized  that 
here  is  a  factor  which  definitely  limits  the  expansion  of  credit. 
The  member  banks  must  have  credit  at  the  Federal  Reserve 
banks  up  to  a  certain  percentage  of  their  liabilities  and  every 
loan  that  is  made  increases  their  liabilities.  They  are  now  in 
debt  to  the  Federal  Reserve  banks  in  the  sum  of  $2,600,000,000. 
The  Federal  Reserve  banks  must  keep  a  certain  percentage  of 
cash  against  their  liabilities,  and  every  loan  they  make  to  their 
member  banks  increases  their  liabilities.  The  system,  as  a 


PRESENT  CONDITION  OF  GOLD-MINING  INDUSTRY         515 

whole,  is  not  up  to  the  limit  of  possible  expansion,  but  it  is 
nearer  than  conservative  financiers  like  to  see  it,  and  for  that 
reason  the  authorities  have  taken  steps  to  discourage  further 
expansion.  That  they  are  justified  in  adopting  this  policy  there 
can  be  no  question.  Bank  loans  have  been  expanding  in  recent 
months  while,  as  the  result  of  gold  exports,  the  reserves  have 
been  falling,  and  we  face  the  fact  that  there  can  be  no  replen- 
ishment from  our  own  mines. 

Deflation  Will  Lower  Prices 

Now  it  may  very  well  be  said  that  the  volume  of  bank  credit 
ought  not  to  be  increased ;  that  it  was  abnormally  swollen  by 
the  Liberty  Bond  flotations  and  other  extraordinary  conditions 
of  wartime,  and  ought  rather  to  be  reduced.  I  agree  with  this 
view.  I  am  not  one  of  those  who  accept  the  present  level  of 
wages  and  prices  as  permanent.  The  whole  situation  is  highly 
inflated,  due  to  the  injection  of  a  great  amount  of  bank  credit 
which  has  been  forced  into  circulation,  serving  as  purchasing 
power  and  diluting  the  value  of  money.  The  Federal  Reserve 
Board  states  that  over  $6,000,000,000  of  Government  paper 
is  held  by  the  banks  as  collateral  for  loans.  The  people  who 
subscribed  for  these  bonds  have  not  paid  for  them,  and  the 
credit  thus  created  is  in  circulation,  checked  from  bank  to 
bank,  and  the  effect  upon  prices  is  precisely  the  same  as  though 
the  Government  had  issued  paper  money  to  pay  its  expenses. 
This  situation  will  not  be  corrected  until  these  loans  are  paid 
off  from  savings  and  the  credit  actually  extinguished.  This  is 
what  should  be  done,  and  obviously  it  would  reduce  the  volume 
of  bank  deposits  and  also  reduce  the  reserve  requirements. 
Nevertheless,  it  can  be  done  only  gradually,  and  it  must  be  con- 
sidered that  the  growth  of  population  and  business  calls  for  a 
natural  increase  all  the  time  in  the  volume  of  credit  and  amount 
of  reserves. 

The  Need  for  a  Healthy  Gold-Mining  Industry 

As  I  view  it,  the  country  can  get  along  without  any  increase 
of  banking  reserves  for  several  years,  while  this  state  of  infla- 
tion is  gradually  being  reduced,  but  it  would  be  a  very  serious 
matter  to  have  the  gold-mining  industry  permanently  crippled 
in  that  time.  I  fear  that  a  low  production  of  gold  and  an  un- 


516         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

favorable  outlook  for  the  industry  at  a  time  when  credit  was 
being  curtailed  and  prices  lowered  would  have  the  effect  of 
reviving  all  the  monetary  heresies  of  the  past.  We  want  to 
stand  by  the  gold  standard ;  it  is  the  sheet-anchor  of  enduring 
prosperity;  but  ihe  gold  standard  will  require  a  healthy  gold- 
mining  industry  to  sustain  it. 

As  in  every  economic  situation,  there  is  a  natural  remedy, 
but  it  takes  time.  Gold  mining  in  this  country  will  dwindle 
down  to  very  small  proportions  and  the  steady  consumption  in 
the  arts  will  be  drawn  mainly  from  bank  reserves,  although  the 
latter  will  be  replenished  by  importations  while  the  exchanges 
are  in  our  favor.  If  the  exchanges  should  turn  against  us,  we 
would  lose  by  exportations.  The  same  influences,  although  not 
so  powerful  in  some  other  fields,  will  diminish  production 
everywhere,  and  the  general  effort  to  get  back  upon  the  gold 
basis  will  restrict  credit  and  turn  prices  downward  until  gold 
production  becomes  profitable  again.  Aside  from  the  loss  in- 
flicted upon  the  industry  in  the  meantime,  the  serious  matter 
is  that  the  industry  may  be  a  long  time  getting  back  into  its 
stride.  While  the  banking  situation  can  easily  stand  restriction 
for  several  years,  and  needs  it,  we  cannot  be  indifferent  to  the 
fate  of  the  industry. 

Gold  Exported  for  Manufacturing  Purposes 

It  is  a  hardship  to  the  producers  that  the  consumers  of  gold 
in  jewelry  and  other  manufactures  should  be  supplied  at  less 
than  the  cost  of  production.  Such  is  not  the  case  now  any- 
where else,  except  as  manufacturers  get  their  supplies  from 
the  United  States  Assay  Office  at  New  York.  The  Canadian 
manufacturers  get  their  supplies  here,  and  since  our  embargo 
upon  gold  exports  was  raised,  approximately  $4,650,000  has 
been  taken  out  for  manufacturers  in  England,  France,  Switzer- 
land, ^Sweden  and  some  other  countries.  This  movement  has 
fallen  off  since  Great  Britain  gave  the  South  African  gold  pro- 
ducers the  privilege  of  disposing  of  their  gold  as  they  pleased. 

It  has  been  the  policy  of  the  United  States  Government  to 
sell  gold  bullion  in  small  bars  through  the  mint  service,  in  order 
to  discourage  the  melting  of  coin.  We  have  no  law  against  the 
melting  of  coin,  as  is  the  case  in  England  and  most  other  coun- 
tries. Of  course,  with  our  great  store  of  gold  coin  freely  avail- 


PRESENT  CONDITION  OF  GOLD-MINING  INDUSTRY        517 

able  it  is  impossible  to  raise  the  price  of  gold  bullion,  but  if  our 
coin  stock  could  effectively  be  protected,  bullion  immediately 
would  cease  going  to  the  mints  and  be  salable  at  a  premium. 
There  are  obvious  objections  to  having  gold  bullion  go  to  a 
premium,  but  I  think  at  the  moment,  when  all  the  rest  of  the 
world  is  in  that  situation,  the  chief  one  is  sentimental.  People 
are  startled  at  the  suggestion  that  the  value  of  gold  bullion 
might  openly  be  disassociated  from  the  value  of  gold  coin,  but 
that  is  the  situation  in  England  and  nobody  now  pays  any 
attention  to  it.  Even  in  this  country,  both  coin  and  bullion 
would  have  commanded  a  premium  during  the  war  if  it  had 
been  obtainable  for  export.  The  truth  is  that  the  value  of  gold 
is  now  disassociated  from  the  value  of  all  other  commodities. 
It  is  not  the  real  standard  by  which  values  are  measured.  The 
problem  is  to  restore  it  as  the  standard,  and  meantime  we  may 
well  consider  whether  the  gold-mining  industry  may  not  some- 
how be  tided  over  the  crisis  for  the  sake  of  future  usefulness. 


518         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

GOLD  EXCISE  AND  PREMIUM  PROPOSAL 
By  JOHN  CLAUSEN,  Vice- President,  Chemical  National  Bank,  New  York 

A  great  man  once  said  "Necessity  opens  our  eyes  to  the 
advantage  of  fresh  principles,"  and,  as  I  see  it,  this  is  now  the 
position  in  which  we  as  other  nations  find  ourselves.  The 
greatest  war  the  world  has  ever  seen  has  so  altered  conditions 
that  methods  and  customs  different  from  those  heretofore 
known  or  used  necessarily  must  take  the  place  of  the  old  in 
order  to  keep  abreast  of  the  new  order  of  things.  In  reality, 
a  very  important  issue  is  presented  as  to  whether  the  standard 
of  value  of  the  world  will  in  future  be  gold  or  become  a  com- 
bination of  silver  and  gold,  and  if  so,  what  effect  such  changes 
would  have  on  the  trading  powers  of  nations.  It  is  obvious 
that  if  a  bi-metallic  standard  were  adopted  as  media,  the  ques- 
tion of  the  value  between  the  metals  themselves  would  become 
one  of  vital  concern.  Then  again,  for  the  actual  needs  of  people 
there  may  be  a  scarcity  of  gold  circulating  as  money  for  trading 
purposes,  or  as  affecting  the  position  of  governments  and  banks 
and  the  availability  of  that  precious  metal  in  proportion  to 
liabilities. 


Financial  Status  After  Civil  War 

There  are  many  interesting  angles  from  which  to  view  this 
important  subject,  but  it  may  be  of  general  benefit  here  to  re- 
count what  happened  in  this  country  during  and  after  our 
Civil  War. 

As  an  inevitable  result  of  government  policy  which  had 
placed  upon  the  banks  a  burden  too  heavy  for  them  to  carry, 
the  financial  institutions  in  New  York  and  other  sections  were, 
during  the  Civil  War,  forced  to  discontinue  specie  payments, 
which  subsequently  brought  about  the  suspension  of  the 
National  Treasury. 

At  the  beginning  of  1862  a  bill  was  introduced  which  had  for 
its  purpose  the  making  of  government  notes  legal  tender,  and 
although  that  measure  was  considered  unconstitutional,  it 


GOLD  EXCISE  AND  PREMIUM  PROPOSAL  519 

became  law  in  February  of  the  same  year.  The  issue  of  green- 
backs payable  to  bearer,  after  several  amendments  of  the  bill, 
was  authorized  up  to  a  maximum  of  four  hundred  million 
dollars.  When  the  greenbacks  were  put  out  it  was  expected 
that  they  would  circulate  at  par  with  the  gold  dollar,  contain- 
ing 23.2  grains  of  pure  metal,  but  a  year  after  the  first  Legal 
Tender  Act  had  been  passed,  paper  money  had  an  exchange 
value  equal  to  only  14.5  grains  of  gold.  Its  value  rose  in 
August,  1863,  to  18.4  grains,  but  fell  in  July,  1864,  to  9  grains, 
which  appears  to  have  been  its  lowest  point.  The  premium  on 
gold  was  then  such  that  a  dollar  in  paper  money  was  not  worth 
more  than  36  cents  in  gold  coin. 

The  most  striking  example  of  profiteering  during  that  period 
was  the  Black  Friday  Conspiracy  of  September  24,  1869,  when 
a  group  of  speculators  bought  up  large  quantities  of  gold — 
creating  an  artificial  scarcity — and  as  a  result  that  commodity 
could  only  be  obtained  from  this  clique  at  ruinous  terms.  This 
brought  about  many  failures,  and  to  check  gambling  in  gold 
and  reduce  the  premium  on  it,  the  Anti-Gold  Law  was  passed, 
but  as  it  did  not  materially  bring  the  premium  on  gold  to  a 
lower  level,  it  was  very  soon  repealed. 

In  June,  1862,  Congress  authorized  the  use  of  "Postage  and 
other  stamps  of  the  United  States"  as  money  because  of  the 
demand  for  small  currency,  notwithstanding  the  circulation  of 
the  so-called  "Shinplasters,"  which  were  issued  in  denomina- 
tions of  5,  10,  20,  25  and  50  cents. 

In  some  of  the  Western  States  attempts  were  made  to  main- 
tain specie  payments — after  they  had  in  the  main  been  given 
up  in  the  Eastern  States — but  California  alone  had  the  distinc- 
tion of  remaining  on  a  sound  metallic  basis  during  the  Civil 
War.  In  New  York  some  of  the  banks  felt  confident  of  ability 
to  continue  paying  cash,  but  none  did — if  the  records  are  com- 
plete— with  the  exception  of  the  Chemical  National  Bank.  The 
fact  that  this  bank  did  not  suspend  specie  payments  either  in 
the  panic  of  1857  or  in  the  general  disaster  of  1861,  and  thaf  it 
continued  to  redeem  its  pledges  in  gold  for  12  years  after  the 
government  had  begun  to  dishonor  the  demand  notes  of  the 
nation,  is  a  fact  well  worth  recording.  It  was  not  until  1876 
that  gold  again  sold  at  par  throughout  the  United  States. 


520         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  Panic  of  1893 

Since  that  period  the  more  notable  event  was  the  panic  of 
1893,  which  was  followed  by  a  depression  throughout  the 
nation,  with  the  result  that  a  large  amount  of  gold  was  drained 
from  this  country  to  Europe.  The  Treasury's  reserve  became 
so  low  in  November,  1894,  that  a  sale  of  government  bonds 
was  resorted  to ;  in  fact,  the  stock  of  coin  was  reduced  to  such 
an  extent  that  there  were  outstanding  more  gold  notes  than 
coin,  leaving  a  part  of  the  certificates  represented  by  bullion 
in  the  form  of  bars.  Again,  during  February,  1895,  and  also 
in  July  of  the  following  year,  strong  syndicates  headed  by  lead- 
ing bankers  in  New  York  accomplished  the  difficult  task  of 
bolstering  up  the  finances  of  the  United  States  Government 
and  it  was  largely  due  to  their  activities  that  the  United  States 
remained  on  a  gold  basis.  The  success  of  these  combinations 
had  a  far-reaching  influence  on  business,  and  as  soon  as  it  was 
seen  that  the  gold  obtained  from  abroad  was  not  going  to  be 
lost  at  once  as  in  previous  bond  sales,  confidence  was  again 
revived  and  the  financial  position  of  the  United  States  improved 
so  favorably  in  the  eyes  of  Europe  that  it  was  possible  to  float 
large  holdings  of  American  securities  abroad. 

In  August  of  1914  Foreign  Exchange  became  demoralized, 
and  to  remedy  that  situation  a  gold  pool  was  created,  when 
influential  banks  and  bankers  throughout  the  country  joined  in 
an  agreement  to  provide  mail  and  telegraphic  transfers  to 
Europe  in  lieu  of  gold  for  export,  which  proved  a  helpful  factor 
in  restoring  order  and  confidence. 

Accumulation  of  Gold  Reserves  Prior  to  War 

For  several  years  prior  to  the  declaration  of  war  in  Europe 
the  countries  of  France,  Russia  and  Germany  especially  had 
been  engaged  in  an  eager  competitive  scramble  for  gold,  which 
resulted  in  the  holdings  of  their  great  state  institutions  in- 
crea'sing  rapidly.  On  this  account,  at  the  outbreak  of  hostili- 
ties, we  found  them  with  what  was  up  to  that  time  the  peak  of 
their  gold  reserve. 

The  embargo  which  was  universally  adopted  clearly  demon- 
strated the  desire  of  every  commercial  nation  to  control  and 
retain  its  supply  of  gold.  As  far  as  the  United  States  was  con- 
cerned, other  than  the  necessity  of  obtaining  government  per- 


GOLD  EXCISE  AND  PREMIUM  PROPOSAL  521 

mission  to  export  gold  in  coin  or  bars,  its  circulation  in  this 
country  has  not  been  restricted — although  the  efforts  of  banks 
and  individuals  alike  have  been  directed  toward  harmoniously 
co-operating  with  the  government  in  concentrating  the  nation's 
supply  with  the  Federal  Reserve  Banks. 

One  of  the  most  curious  economic  features  of  the  present 
situation  is  the  strong  light  which  it  has  thrown  on  the  fact 
that  it  is  possible  to  have  too  much  of  a  good  thing,  even  when 
that  thing  is  gold.  This  is  forcefully  demonstrated  if  we  glance 
at  the  financial  position  of  the  Scandinavian  countries,  where 
the  law  has  been  carried  so  far  as  to  relieve  the  government 
banks  of  the  statutory  obligation  to  buy  gold  and  coin  it  for  all 
those  who  bring  it  in.  This  naturally  prevented  other  countries 
dealing  with  Scandinavia  from  paying  for  purchases  in  gold, 
and  the  barter  of  commodities  was  the  only  means  open  for 
concluding  commercial  transactions. 

It  has  lately  been  said  that  the  world  is  divided  into  two 
classes  of  countries — those  which  decline  to  accept  gold  and 
those  which  refuse  to  part  with  it.  Sometimes  it  is  asked  how 
anyone  can  possibly  refuse  to  take  gold  in  payment,  but  this  is 
explained  by  the  statement  that  gold  in  bars  or  foreign  coins  is 
not  legal  tender  anywhere.  No  person  in  Scandinavia,  for 
example,  could  be  made  to  take  gold  bars  or  American  Eagles 
in  reimbursement  for  goods  to  meet  a  required  payment  in 
legal  tender  currency  of  Denmark,  Norway  or  Sweden. 

Europe  to  Sustain  Gold  Standard 

The  issue  and  circulation  of  paper  credits  throughout  the 
leading  nations  of  the  world  has  been  proportionately  far 
greater  than  their  holdings  of  gold  and  this  state  of  affairs  has 
naturally  resulted  in  inflation  on  an  alarming  scale.  The 
thought,  however,  that  European  nations  may  possibly  repu- 
diate part  of  their  war  debts  for  the  sake  of  reducing  the 
amount  of  currency  outstanding  against  government  bonds  or 
notes  is  obviously  superficial.  Finance  has  become  an  inter- 
national, rather  than  a  national  question  and  the  monetary 
history  of  any  country  tends  to  become  more  and  more  merged 
with  that  of  the  whole  civilized  world. 

International  credit  is  firmly  established  on  a  gold  basis  and 
no  country  has  any  interest  in  upsetting  the  present  standard, 


522         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

although  it  is  contended  that  notwithstanding  a  great  produc- 
tion of  new  gold,  it  may  not  necessarily  assure  universal  gold 
standardism,  as  it  would  be  a  mere  drop  in  the  bucket  of  our 
future  needs.  If  the  world's  credit,  therefore,  is  to  be  carried 
on  with  gold,  every  ounce  that  can  possibly  be  produced  will  be 
required  as  a  basic  foundation  upon  which  international  and 
national  finance  has  been  reared. 

Production  of  Gold  a  Vital  Necessity 

The  production  of  gold  is  a  vitally  essential  industry  which, 
for  obvious  reasons,  should  be  promoted  to  the  fullest  extent. 
It  is  very  apparent,  however,  that  with  a  fixed  value  for  the 
yellow  metal,  together  with  the  rapidly  increasing  cost  of  ma- 
terial, labor  and  transportation,  this  particular  industry  as 
now  developed  is  seriously  affected  and  it  would  seem  inevitable 
that  unless  some  form  of  government  relief  is  given  to  the  pro- 
ducing mines,  many  of  them  will  be  compelled  to  discontinue 
operations. 

In  a  letter  addressed  to  the  Hon.  Charles  A.  Sulzer  relating 
to  the  present  conditions  concerning  the  production  of  gold  in 
Alaska,  the  Secretary  of  the  Treasury  clearly  voiced  the  atti- 
tude of  our  Government  when  he  stated :  "I  fully  appreciate 
that  with  the  rising  cost  of  raw  material  and  labor  and  with  a 
fixed  value  for  their  output,  the  gold  mines  are  facing  difficult 
conditions.  I  should  be  sorry,  however,  if  for  this  reason  there 
was  any  relaxation  in  the  effort  to  produce  gold.  At  no  time 
has  this  country  so  much  required  the  largest  possible  produc- 
tion of  gold  as  at  present.  *  *  *  In  order  to  place  the 
enormous  amount  of  government  bonds  required  to  finance  our 
war  expenditures,  a  large  credit  structure  will  inevitably  be 
erected  upon  our  gold  reserves,  and  it  is  necessary  that  these 
reserves — which  are  the  foundation  of  the  structure — shall  be 

maintained  on  the  broadest  possible  basis." 

r 

Monetary  Price  of  Gold  Will  Remain  Fixed 

There  are  people  who  argue  that  if  the  government  would 
agree  upon  a  plan  to  increase  the  value  of  gold  from  $20.67  to, 
say,  $30  or  $40  a  fine  ounce  it  would  make  a  settlement  of  obli- 
gations possible  with  only  half  the  metallic  requirement  other- 
wise necessary  to  redeem  outstanding  paper  credits.  Thia 


GOLD  EXCISE  AND  PREMIUM  PROPOSAL  523 

course,  radical  to  say  the  least,  would  have  a  disastrous  effect 
upon  all  credits,  and  especially  reflect  upon  the  cost  of  living, 
which,  in  all  probability,  would  climb  to  limits  beyond  the 
reach  of  the  average  citizen.  Increasing  the  value  of  gold  or 
giving  it  a  premium  does  not  necessarily  give  it  a  higher  pur- 
chasing power,  but,  on  the  other  hand,  in  the  final  adjustment 
seriously  disrupts  the  basis  of  international  credit. 

When  peace  is  finally  restored  all  the  world  will  be  faced 
with  a  period  of  great  financial  and  industrial  uncertainty,  and 
to  pass  through  it  successfully  will  be  a  task  that  will  need  all 
the  statesmanship  civilization  can  muster.  To  increase  this 
uncertainty  by  tampering  with  the  standard  of  international 
payment  would  be  an  extraordinarily  futile  means  of  handling 
the  situation  and  only  make  the  confusion  worse  confounded. 

The  principal  nations  of  the  world  have  adopted  gold  as  the 
basis  of  their  currency  system.  The  monetary  price  for  it  is 
everywhere  the  same  and  equally  certain  at  the  standard  price 
of  $20.67  a  fine  ounce.  It  may  be  an  anomaly  that  economic 
civilization  should  depend  for  means  of  payment  on  the  supply 
of  a  particular  metal,  but  it  will  take  much  ingenuity  to  find  a 
practical  substitute  for  gold  and  secure  for  it  the  popularity 
and  confidence  that  this  precious  metal  commands.  The  mere 
fact  that  it  has  been  chosen  by  the  most  enlightened  commer- 
cial nations  is  strong  proof  that  it  is  the  best  single  commodity 
for  practical  use  as  a  standard. 

The  Increasing  International  Demand  for  Gold 

The  disproportionate  distribution  of  gold  among  world  na- 
tions attracts  attention  to  the  study  of  the  part  that  this  metal 
plays  and  is  to  play  in  future  in  the  world's  economic  affairs. 
It  is  apparent  to  the  careful  observer  that  the  pace  at  which  the 
production  of  gold  increases  is  not  as  fast  as  the  rise  in  value 
of  the  world's  wealth. 

The  vast  obligations  piled  up  by  the  nations,  the  huge  issues 
of  paper  currency,  the  refunding  of  debts  and  resumption  of 
specie  payments  are  among  the  most  urgent  and  difficult  prob- 
lems with  which  the  world  is  now  confronted.  This  makes  it 
only  too  apparent  that  gold  is  a  necessity  for  the  credit  and 
financial  unity  of  nations  and  it  is  essential  that  an  adequate 
foundation  of  gold  be  created  to  uphold  that  system. 


524         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

One  of  the  first  acts  of  the  British  Government  after  England 
was  plunged  into  war  was  to  insure  that  the  gold  turned  out  of 
her  mines  should  be  safeguarded,  and  steps  were  taken  for  the 
deposit  of  new  holdings  in  Canada,  South  Africa  and  Australia 
to  the  credit  of  the  Bank  of  England.  This  arrangement  had 
many  advantages  and  tended  greatly  to  facilitate  the  concen- 
tration of  the  metal  where  it  was  most  needed  for  the  settle- 
ment of  liabilities,  and  Great  Britain  has  in  this  way  used  her 
gold  unsparingly  to  meet  immediate  obligations. 

The  enormous  increase  in  credits  and  paper  money  circu- 
lating in  every  country  of  the  globe  is  reacting  very  materially 
on  the  present  and  prospective  supply  of  gold,  and  it  would 
seem  timely  to  briefly  review  its  relative  influence  on  prices  in 
general,  which  in  normal  times  zigzag  to  meet  the  demand  for 
and  the  supply  of  credit  and  gold.  If,  for  instance,  prices  and 
wages  are  increased,  so  far  as  they  are  paid  in  gold,  it  will 
require  a  proportionate  amount  of  money  to  meet  the  higher 
costs.  It  follows  as  a  matter  of  course  that  a  large  circulation 
of  money  is  required  to  meet  the  demand.  While  the  quantity 
of  gold  available  as  money  is  seen  to  exert  an  influence  in  the 
direction  of  raising  or  lowering  prices,  it  would  seem  equally 
certain  that  as  international  commerce  progresses  and  the 
system  of  credit  expands,  an  increased  world's  supply  of  gold 
is  a  matter  of  vital  importance. 

It  is  true  that,  in  practice,  many  transactions  of  buying  and 
selling  are  set  off  one  against  another,  but  there  can  never  be 
a  system  of  finance  carried  on  in  any  country,  operating  under 
a  gold  standard,  without  a  basis  of  money  somewhere. 

Decline  in  Gold  Production  a  Serious  Financial  Menace 

The  tendency  to  a  further  rise  in  prices  is  likely  to  continue 
for  several  years ;  the  increase  in  the  cost  of  living  and  the  im- 
portance of  adjusting  wages  to  prices;  the  increasing  obliga- 
tions of  nations  extending  over  long  periods ;  the  problem  of  a 
universal  standard  of  values;  the  development  of  commerce 
and  banking;  the  growth  of  population  and  wealth — are  ques- 
tions which  are  becoming  of  increasing  importance  as  time 
runs  on.  With  the  falling  off  in  the  production  of  gold  and  a 
material  rise  in  gold  prices  a  very  serious  state  of  affairs  is 
presented  which  is  likely  to  affect  the  international  economic 
position  of  all  peoples. 


GOLD  EXCISE  AND  PREMIUM  PROPOSAL  525 

Endorsement  of  Gold  Excise  and  Premium  Proposal 

It  would  seem  very  important,  not  only  on  account  of  our 
internal  economic  position,  but  also  because  of  our  position  in 
international  trade,  to  protect  the  monetary  gold  reserve  of  the 
United  States  from  excessive  withdrawals  for  other  than  mone- 
tary uses.  Statistics  of  this  year  indicate  that  the  consumption 
of  gold  in  the  arts  and  trades  will  exceed  the  production  of  new 
gold  in  this  country. 

I  have  carefully  analyzed  the  legislative  proposal  suggested 
by  The  American  Mining  Congress  for  the  consideration  of 
Congress  to  create  a  fund  by  imposing  an  excise  upon  the  man- 
ufacture and  sale  of  gold  used  for  other  than  monetary  pur- 
poses, this  fund  to  be  utilized  as  a  premium  to  producers  of 
new  gold  in  order  to  stimulate  production.  This  plan  would 
seem  a  practical  solution  of  the  complex  problem  with  which 
the  gold-mining  industry  is  now  confronted,  since  it  eliminates 
monetary  entanglements  and  reduces  the  subject  to  the  sale  of 
gold  as  a  commodity  in  its  manufactured  state.  It  would  seem 
that  such  stimulation  of  the  gold-mining  industry  would  insure 
a  sufficient  supply  of  gold  to  the  trades  and  at  the  same  time 
protect  the  gold  reserve.  The  soundness  of  this  proposal  should 
commend  itself  to  the  favorable  consideration  of  Congress,  and 
on  account  of  the  immediate  need  for  constructive  relief,  it  is 
to  be  hoped  that  the  passage  of  this  legislation  will  be  expedited. 


526         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


A  PROPOSED  SOLUTION  OF  THE  COMPLEX 

GOLD  PROBLEM 

i 

By  H.  N.  LAWRIE,  Chief  Precious  and  Rare  Metals  Division, 
American  Mining  Congress 

At  the  annual  convention  of  the  American  Bankers'  Associa- 
tion, the  following  resolution  was  adopted  unanimously  on 
October  2,  1919 : 

WHEREAS,  The  gold  production  of  the  United  States,  which 
declined  so  rapidly  during  the  war  period,  has  since  the  signing 
of  the  armistice  still  further  declined  because  of  the  extreme 
economic  pressure  to  which  the  gold-mining  industry  has  been 
subjected,  and 

WHEREAS,  Gold  is  the  standard  of  value  and  the  basis  of  all 
credit,  and  it  is  vitally  important  to  the  financial  and  commercial 
life  of  the  nation  that  the  monetary  reserve  be  protected,  now, 
therefore,  be  it 

Resolved,  That  the  American  Bankers'  Association,  in  conven- 
tion assembled,  respectfully  requests  and  urges  upon  the  Govern- 
ment of  the  United  States  the  desirability  of  maintaining  the 
domestic  production  of  new  gold  in  sufficient  volume  to  satisfy 
the  present  anticipated  trade  requirements  for  this  metal,  and 
asks  that  steps  be  taken  immediately  to  that  end,  and  be  it 
further 

Resolved,  That  the  secretary  of  this  Association  be,  and  hereby 
is,  instructed  to  send  a  copy  of  this  resolution  to  the  President 
of  the  United  States,  the  Secretary  of  the  Treasury,  and  the 
members  of  the  Senate  and  the  House  of  Representatives  of  the 
United  States,  advising  them  of  its  adoption,  and  be  it  also 
further 

Resolved,  That,  considering  the  great  importance  of  this  sub- 
ject, this  convention  recommends  to  the  Executive  Council  that 
the  matter  be  referred  to  the  Federal  Legislative  Committee  and 
the  Currency  Commission  for  an  exhaustive  study  and  such 
action  as  may  be  deemed  necessary. 

It  will  be  recalled  that,  on  September  27,  1918,  the  American 
Bankers'  Association  passed  a  resolution  urging  the  Govern- 
ment to  take  steps  to  maintain  the  normal  production  of  gold 
in  the  United  States.  At  that  time,  a  war  emergency  existed 
and  it  was  anticipated  that  it  would  be  necessary  greatly  to 
expand  the  credit  structure  of  the  United  States. 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM    52T 

A  year  has  passed  since  the  armistice  was  signed,  and  this 
same  organization  adopts  a  resolution  which  is  far  more  specific 
and  emphatic  with  regard  to  protecting  the  monetary  reserve 
from  depletion  by  other  than  monetary  uses.  It  is  evident  that 
the  bankers  have  decided  that  the  financial  requirements  of 
reconstruction  and  the  re-establishment  of  international  trade 
on  a  sound  basis  make  it  as  necessary  now  to  protect  the  mone- 
tary reserve  from  unnecessary  depletion  as  it  was  when  the 
country  was  under  the  pressure  of  war. 

The  bankers  are  informed  that  the  mine  production  of  gold 
in  the  United  States  has  decreased  in  the  last  three  years  some 
33  per  cent.,  and  that  the  economic  pressure  generally  has  be- 
come more  intense  during  1919,  which  will  result  in  a  corre- 
sponding decline  in  the  output  of  the  metal  for  this  year;  they 
know  that  the  consumption  of  gold  in  the  arts  and  for  manu- 
facturing purposes  will  exceed  the  production  of  new  gold  this 
year  and  that  for  next  year  the  production  will  fail  by  a  wider 
margin  to  meet  the  trade  requirements  unless  something  sub- 
stantial is  done  to  balance  the  economic  equation  of  the  gold- 
mining  industry ;  they  know  that  unless  the  production  of  new 
gold  is  sufficient  to  satisfy  manufacturing  requirements,  there 
are  but  two  alternatives,  namely : 

1.  That  gold  now  in  the  monetary  reserve,  dedicated  to  mone- 
tary use,  will  be  withdrawn  for  the  manufacture  of  jewelry, 
etc.,  and  will,  therefore,  lose  its  monetary  utility. 

2.  That  sales  of  gold  for  manufacturing  purposes  will  have 
to  be  curtailed  or  discontinued,  which  will  threaten  the  very 
life  of  the  manufacturer  and  consumer  of  gold. 

The  bankers  realize  that  neither  of  these  alternatives  is 
desirable,  but  insist  that  the  monetary  reserve  be  protected 
from  industrial  consumption  and  that  the  Government  take 
steps  to  stimulate  the  production  of  new  gold  to  completely 
satisfy  all  manufacturing  requirements.  To  stimulate  the 
domestic  production  of  gold  without  altering  the  monetary 
unit — a  change  which  for  financial  and  economic  reasons  can- 
not be  considered — is  the  problem  which  now  confronts  the 
consumers  no  less  than  the  producers  of  gold.  This  resolution 
of  the  American  Bankers'  Association  specifically  assigns  a 
definite  responsibility  to  this,  the  third  National  Gold  Confer- 
ence, which  has  been  called  to  develop  a  constructive  solution 
of  this  most  complex  and  important  national  problem. 


528         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

A  careful  study  of  the  following  facts  with  reference  to  the 
present  monetary  status  of  gold,  the  production  of  new  gold, 
and  the  consumption  of  gold  in  the  arts  and  manufactures, 
should  prove  helpful  in  the  formulation  of  a  constructive 
national  policy,  which  will  at  one  and  the  same  time  protect  the 
monetary  reserve,  stimulate  the  gold  production  of  the  United 
States  and  thereby  insure  the  consumers  of  gold  a  sufficient 
supply. 

The  Decline  in  United  States  Gold  Stock  and  Gold  Ratio  of  the 
Federal  Reserve  Bank 

In  accordance  with  the  Circulation  Statement  of  the  Treasury 
Department,  the  general  stock  of  gold  coin  on  July  1,  1919, 
(including  bullion  in  the  Treasury) ,  amounted  to  $3,095,077,- 
467,  and  on  October  1,  $2,905,726,555,  a  net  loss  to  the  mone- 
tary gold  reserve  of  $189,350,912,  or  6.1  per  cent.  This  indi- 
cates how  rapidly  and  to  what  extent  the  total  monetary  gold 
reserve  of  the  United  States  has  contracted. 

The  statement  of  the  Federal  Reserve  Bank  of  New  York 
shows  that  on  June  6,  1919,  the  total  gold  reserve  was  $766,- 
149,538,  and  on  October  17,  1919 — 19  weeks  later — it  amounted 
to  $552,495,772,  a  decrease  of  approximately  28  per  cent.  The 
reserve  notes  of  the  New  York  Reserve  Bank  in  circulation 
increased  about  3  per  cent,  in  this  same  period,  while  the  net 
deposits  declined  some  10  per  cent.  The  legal  requirements 
under  the  Federal  Reserve  Act  are  that  35  per  cent,  of  the  net 
deposits  and  40  per  cent,  of  the  Federal  Reserve  notes  in  circu- 
lation shall  be  gold.  The  Federal  Reserve  Board  first  sets  aside 
35  per  cent,  of  the  deposit  liabilities,  and  the  remainder  of  the 
reserve  gold  is  then  computed  in  terms  of  the  Federal  Reserve 
notes  in  circulation.  On  October  17,  the  remaining  gold  reserve, 
after  having  satisfied  the  deposit  liabilities,  in  accordance  with 
the  above  formula,  amounted  to  but  39.9  per  cent,  of  the 
Federal  Reserve  notes  in  circulation,  which  is  below  the  legal 
requirement,  one-tenth  of  1  per  cent.  This  may  be  attributed 
to  a  shrinkage  of  28  per  cent,  in  the  gold  reserve  and  the  expan- 
sion of  reserve  notes  in  circulation  by  some  3  per  cent.,  while 
had  a  decrease  of  some  10  per  cent,  in  net  deposits  not  occurred, 
the  situation  would  have  been  still  more  critical.  It  is  evident 
that  the  credit  expansion  due  to  increasing  the  currency  in 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM    529 

circulation  exceeded  on  October  17  the  legal  gold  reserve  mini- 
mum for  the  Federal  Reserve  Bank  of  New  York.  The  decline 
in  the  gold  ratio  of  the  entire  Federal  Reserve  system  has  been 
progressive  from  week  to  week  for  some  time  past,  thereby 
rapidly  and  consistently  approaching  the  legal  gold  reserve 
limit. 

The  time,  therefore,  has  arrived  when  not  only  the  currency 
in  circulation  should  gradually  be  contracted,  but  also  the 
monetary  gold  reserve  should  be  very  cautiously  guarded 
against  depletion  by  other  than  monetary  uses.  While  it  is 
beneficial  to  our  international  trade  to  send  foreign  countries 
as  much  gold  as  good  finance  will  permit,  the  effect  will  be 
correspondingly  to  reduce  the  gold  reserve  of  the  Federal 
Reserve  Bank,  upon  which  net  deposits  and  bank  notes  in  cir- 
culation are  based.  This  process  is  one  of  healthy  financial 
rehabilitation  of  the  countries  with  whom  we  desire  to  trade 
and  of  depletion  of  our  own  gold  reserve.  It  is  evident  that,  as 
the  volume  of  currency  is  contracted,  more  gold  may  safely  be 
spared  for  export  without  injury  to  our  domestic  financial 
position. 


United  States  Imports  and  Exports  of  Gold 

It  will  be  observed  from  Table  1,  Chart  1,  that  the  United 
States  had  imported  gold  in  the  amount  of  $1,114,359,161  in 
excess  of  the  exports  during  the  three  years  ending  June  30, 
1917.  Since  our  entrance  into  the  war,  the  flow  of  gold  out  of 
the  country  has  been  continuously  in  excess  of  the  amount 
coming  in,  so  that,  for  the  fiscal  year  ending  June  30,  1918,  the 
gold  balance  against  the  United  States  was  $66,438,741 ;  for  the 
fiscal  year  ending  June  30,  1919,  $54,211,802;  and  for  the  first 
quarter  of  this  fiscal  year  1919-20  (the  months  of  July,  August 
and  September),  the  amount  was  $123,104,399,  making  a  total 
drain  upon  our  gold  resources  of  $243,754,942  up  to  September 
30,  1919.  The  gold  balance  in  favor  of  the  United  States  on 
June  30, 1917,  amounting  to  $1,114,359,161,  therefore,  had  been 
reduced  to  $870,604,219  on  September  30,  1919,  or  about  22  per 
cent.  The  black  area  marked  "A"  on  Chart  1  graphically  rep- 
resents the  extent  to  which  we  have  exported  gold  in  excess  of 
our  imports,  while  the  area  "B"  represents  the  gold  balance 


530         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

in  favor  of  the  United  States  during  the  period  before  our 
entrance  into  the  war. 

It  is  important  to  note  that,  since  the  embargo  on  the  expor- 
tation of  gold  was  removed,  we  have  shipped  out  of  the  country 
in  these  last  three  months  of  July,  August  and  September, 
$128,913,011,  and  have  imported  but  $5,808,612,  recording  a 
net  loss  of  the  gold  held  in  the  United  States  of  $123,104,399, 

CHART  1— TABLE  1 
Gold  Imports  and  Exports  of  the  United  States 


1913-14       1914-15       19(5-16      1916-17      1917-18      1948-19 


of  which  amount  $50,532,913  was  sent  to  China,  Hongkong  and 
British  India.  Approximately  40  per  cent,  of  the  entire  gold 
exports  from  the  United  States  to  foreign  countries  during  this 
period  was  sent  to  countries  from  which  the  possibility  of  its 
return  is  extremely  doubtful.  Every  effort  should  be  made  to 
limit  the  gold  sent  to  countries  that  are  known  to  hoard  gold, 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM 


531 


in  order  that  our  monetary  gold  reserve  may  be  conserved  for 
monetary  purposes. 

It  has  just  been  reported  that  Colombia  and  Salvador  have 
passed  new  currency  laws,  making  United  States  gold  coins 
legally  current  as  a  medium  of  exchange  in  those  countries. 
The  trade  balance  with  Colombia  for  1916,  the  latest  year 
reported,  was  against  the  United  States  in  the  amount  of  some 
$12,000,000.  It  is,  therefore,  anticipated  that  our  gold  coin  and 

TABLE  1— CHART  1 
Gold  Imports  and  Exports  of  the  United  States 

Fiscal  Years  1914-19  and  the  First  Quarter,  1919-20 


Years  Ending  June  30 
1913-14  

Exports 
$112,038,529 

Imports 
$66,538,659 

Gold  Balance 
Against  U.S. 

$45,499,870 

Gold  Balance 
in  Favor  U.S. 

1914-15  

146,224,148 
90,249,548 
291,921,225 

171,568,755 
494,009,301 
977,176,026 

$    25,344,607 
403,759,753 
685,254,801 

1915-16  . 

1916-17  

Total  three  war  years, 
1914-17 

528,394,921 

190,852,224 
116,575,535 

1,642,754,082 

124,413,483 
62,363,733 

1,114,359,161 

1917-18 

66,438,741 
54,211,802 

1918-19  

Total  five  years,  1914-19 
Istfiscal  quarter,  1919-20 

Total  five  years  and  one 
quarter. 

835,822,680 
128,913,011 

1,829,531,298 
5,808,612 

120,650,543 
123,104,399 

993,708,618 

964,735,691 

1,835,339,910 

243,754,942 

870,604,219 

Statistics  of  Bureau  of  Foreign  and  Domestic  Commerce. 

bullion  will  be  sent  to  that  country  in  order  to  liquidate  the 
trade  balance  which  probably  will  continue  in  favor  of  Colom- 
bia. This  fact  is  pointed  out  merely  to  indicate  that  many 
countries  are  finding  it  more  expedient  than  ever  before  to 
adopt  the  same  monetary  vocabulary  as  has  become  the  finan- 
cial code  of  the  larger  nations  of  the  world.  There  are  other 


532         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

countries  now  on  the  silver  basis  which  no  doubt  will  soon  find 
it  necessary  to  adopt  the  gold  standard  in  order  to  accommo- 
date themselves  to  the  new  era  of  international  trade.  These 
citations  foreshadow  a  larger  international  monetary  use  for 
gold. 

Decline  in  Gold  Production 

The  gold  production  of  the  world  reached  its  high  point  in 
1915  at  $469,000,000,  and,  according  to  a  very  recent  estimate, 
production  for  1918  amounted  to  $374,000,000,  a  decline  of 
'$95,000,000,  or  approximately  20  per  cent.  Reports  for  1919 
from  South  Africa  and  other  foreign  gold-producing  countries 
indicate  that  the  decline  for  this  year  will  be  still  more  acceler- 
ated. Our  chief  concern  in  the  gold  production  of  foreign 
countries  lies  in  the  fact  that,  when  the  gold  production  de- 
clines there  is  less  new  gold  to  find  its  way  into  the  monetary 
reserves  of  the  countries  with  whom  we  are  transacting  busi- 
ness, and  many  of  whom  are  in  debt.  This  fact  makes  it  still 
more  important  that  we  should  find  some  constructive  means 
to  maintain  our  normal  pre-war  gold  production,  in  the  hope 
that  by  the  same  means  other  nations  may  be  able  to  maintain 
their  normal  production  during  this  economic  crisis. 

In  this  same  period,  the  mine  production  of  gold  in  the 
United  States  had  declined  from  $98,000,000  in  1915  to  $66,- 
000,000  in  round  numbers  in  1918,  or  some  33  per  cent.  On 
account  of  the  continued  increase  of  commodity  prices,  the  in- 
creased inefficiency  of  labor  in  1919,  and  the  anticipated  decline 
in-  the  base  metal  output  of  by-product  gold,  the  mine  produc- 
tion of  gold  for  1919  is  estimated  at  some  $55,000,000.  It  is 
generally  known  that  the  copper  and  lead  industries  of  the 
United  States  have  been  operating  on  about  a  65  per  cent,  basis 
for  1919,  which  will  occasion  a  decline  in  the  by-product  gold 
output.  The  shutting  down  of  the  Homestake  mine,  which  pro- 
duced in  1918  gold  in  the  amount  of,  roughly,  $6,000,000,  be- 
comes another  important  item  to  take  into  consideration  in 
estimating  the  gold  output  for  this  year. 

Gold  Consumption  in  Manufactures  and  the  Arts 

It  will  be  observed  from  Table  2,  Chart  2,  that  from  1908  to 
1914,  inclusive,  the  consumption  of  gold  in  the  arts  shows  a 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM          533 

progressive  increase  from  $31,476,091  in  1908  to  $45,520,032 
in  1914,  an  increase  of  $14,043,941,  or  about  44.6  per  cent. 

In  the  year  1915,  due  to  the  uncertainty  as  to  what  responsi- 
bilities we  would  have  to  assume  in  the  war,  and  the  general 
business  lethargy,  the  gold  consumed  in  the  trades  declined 
some  $18,000,000  to  $37,820,027. 

At  the  beginning  of  1916,  gold  began  to  flow  rapidly  into 
this  country,  together  with  a  large  volume  of  war  orders,  which 
stimulated  the  pulse  of  our  entire  industry  and  made  for  gen- 
erally prosperous  times.  For  1916  and  1917,  the  gold  sold  for 
use  in  manufactures  and  the  arts  was  $51,061,187  and  $52,915,- 
641,  respectively. 

On  account  of  this  tremendous  increase  over  1915  of  some 
40  per  cent,  for  each  of  those  years,  our  financial  authorities 
suspected  that  gold  was  being  hoarded,  and,  in  1918,  when  the 
nation  was  confronted  with  large  and  uncertain  financial 
responsibilities,  placed  an  embargo  on  gold  and  issued  restric- 
tions with  reference  to  allocating  gold  to  the  trades.  This  ac- 
counts largely  for  the  low  consumption  in  1918  of  $40,318,880, 
a  decrease  from  1917  of  some  $12,500,000,  or  more  than  25  per 
cent. 

The  United  States  Assay  Office  at  New  York  had  sold  gold 
for  domestic  manufacturing  purposes  in  the  sum  of  $46,912,895 
up  to  October  24,  1919,  and  of  $4,589,372  for  export  for  manu- 
facturing purposes.  This  is  the  first  time  that  gold  has  been 
sold  by  this  office  for  export  manufacturing  purposes,  and  indi- 
cates the  precautions  which  are  being  taken  by  foreign  coun- 
tries to  protect  their  reserves  from  depletion  by  other  than 
monetary  uses.  These  actual  sales  made  by  the  superintendent 
of  the  New  York  Assay  Office,  together  with  his  estimate  of 
sales  for  the  remaining  period  of  the  year,  total  $61,702,267. 
To  this  total  must  be  added  the  sales  of  gold  made  at  the  other 
mints  of  the  United  States  for  use  in  manufactures  and  the 
arts,  in  order  to  obtain  the  conservative  estimate  of  $65,000,000 
for  the  trade  consumption  of  gold  for  1919.  This  total  repre- 
sents an  increase  of  $25,000,000  over  1918,  or  about  62  per  cent. 
The  gold  coin  which  was  destroyed  by  a  large  number  of 
smaller  manufacturing  jewelers,  who  could  not  purchase  the 
minimum  amount  of  $5,000  worth  of  gold  bars  sold  by  the 
mint,  is  not  included  in  this  estimate.  Ever  since  1885,  the  sum 


534         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  $3,500,000  has  been  allowed  by  the  United  States  Mint  to 
represent  the  United  States  gold  coin  destroyed  for  manufac- 
turing purposes.  There  is  little  question  but  that  an  exact  can- 
vass of  the  situation  would  show  that  this  amount  has  been 
greatly  exceeded  in  recent  years.  In  the  opinion  of  many 
familiar  with  the  jewelry  business,  the  estimate  of  coinage 

CHART  2— TABLE  2 

United  States  Mine  Production  of  Gold  and  Gold  Furnished  for  Use  in 
Manufactures  and  the  Arts. 


1908  1909  1910  1911     1912   1913   1914  1915   1916  1917  1918  1919 


destruction  should  not  be  placed  at  less  than  10  per  cent,  of  the 
actual  sales,  or  $6,500,000  for  1919,  while  others  are  inclined  to 
believe  that  it  may  far  exceed  this  figure.  However  that  may 
be,  taking  the  exact  sales  as  a  basis  for  comparison,  the  gold 
consumed  in  manufactures  and  the  arts  this  year  will  exceed 
the  mine  production  of  new  gold  by  some  $10,000,000,  and,  if 
the  destruction  of  coin  be  included,  in  excess  of  $15,000,000. 
This  negative  monetary  surplus,  representing  the  shortage  of 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM 


535 


newly  produced  gold  for  1919  in  comparison  with  the  gold  con- 
sumed in  manufactures  and  the  arts,  is  graphically  shown  on 
Chart  2  by  the  solid  black  area  to  the  extreme  right  of  the 
chart. 

It  is  interesting  to  know  some  of  the  reasons  for  this  recent 
increase  in  the  consumption  of  gold  in  the  arts. 

TABLE  2— CHART  2 

United  States  Mine  Production  of  Gold  and  Gold  Furnished  for  Use  in 
Manufactures  and  the  Arts. 

Calendar  Years  1908-1919 


Calendar  Years 

Total  Mine 
Production.1 

Total  Consumed 
in  Arts,  etc.2 

Monetary 
Surplus.3 

1908  

$91,682,953 

$31,476,091 

$60,206,862 

1909 

99,189,947 

37,628,769 

61,561,178 

1910  
1911  
1912 

94,778,348 
96,860,352 
92  310,296 

41,787,152 
40,834,292 
43,977,257 

52,991,196 
56,026,060 
48,333,039 

1913  
1914 

89,118,410 
91,329,443 

45,864,066 
45,520,032 

43,254,344 
45,809,411 

1915  
1916  
1917 

98,283,714 
91,307,630 

80,624,484 

37,820,027 
51,061,187 
52  915  641 

60,463,687 
40,246,443 
27  708,843 

1918  
1919  

66,162,130 
56,000,000* 

40,318,8805 
65,000,000° 

25,843.250 
—10,000,000 

1  Statistics  U.  S.  G.  S.  1908-1918. 

2  Statistics  U.  S.  Mint  1908-1918. 

3  The  remainder  of  the  newly  produced  gold  after  satisfying  manufacturing  require- 
ments. 

*  Estimated  mine  production  1919. 

*  U.  S.  Mint  sales  of  New  York  Assay  Office  and  Philadelphia  Mint. 

*  Estimated  consumption  in  Arts   1919  based  on   actual  sales   of  Mint  to  October  24, 
1919,   and   estimated   sales   made   by   Superintendent   U.    S.   Assay   Office,   New   York,   for 
remainder  of  year. 

1.  The  restrictions  under  the  Embargo  Act  were  removed, 
which  made  it  possible  for  the  jewelers  to  obtain  an  unlimited 
supply  of  gold  for  their  use. 

2.  The  trend  of  the  jewelry  business  has  been  toward  the 
larger  production  of  machine-made  jewelry,  which  necessitates 
the  use  of  very  much  heavier  material  to  work  upon. 

3.  The  trade  has  been  unable  to  keep  pace  with  the  rapidly 
increasing  .demand  for  jewelry  and  never  has  the  demand  been 
so  great  for  "decorative"  dental  work. 


536 


PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


Segregation  of  the  Origin  of  Gold  as  a  Basis  for 
Estimating  Future  Declines 

The  average  total  mine  output  of  gold  for  the  decade  1908- 
1917  was  $92,457,551,  and  for  1918,  $66,162,130,  a  decline  of 
$26,385,421,  or  28.5  per  cent.  The  average  total  mine  output 
of  gold  derived  exclusively  from  siliceous  ores  for  the  decade 
1908-1917  was  $61,189,760,  and  for  1918,  $41,909,673,  a  de- 

CHART  3— TABLE  3 
United  States  Mine  Production  of  Gold  in  Dollars  Segregated  as  to  Origin 


cline  of  $19,280,087,  or  31.5  per  cent.  The  average  total  output 
of  gold  from  the  washing  of  placer  gravel  for  the  decade  1908- 
1917  was  $23,331,756,  and  for  1918,  $15,695,637,  a  decline  of 
$7,636,119,  or  41.9  per  cent. 

Referring  to  Chart  3,  it  will  be  observed  that  the  total  mine 
output  of  gold  has  continuously  declined  from  1915,  while  slight 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM 


537 


increases  were  recorded  in  the  placer  and  by-product  gold  out- 
put for  1916  and  slight  decreases  in  both  of  these  sources  of 
gold  for  1917,  showing  beyond  question  that  the  decline  for 
these  two  years  was  due  entirely  to  the  depreciated  output  from 
siliceous  ore  operations.  This  condition  may  be  attributed  to 

TABLE  3— CHART  3 

United  States  Mine  Production  of  Gold  in  Dollars1  Segregated  as  to  Origin 
Calendar  Years  1908-18 


Calendar 
Year 

Total 
Mine 
Output 

Siliceous 
Ore 
Output 

Per 
Cent, 
of 
Total 

Placer 
Output 

Per 
Cent, 
of 
Total 

Base  Ore 
By-product 
Gold 

Per 
Cent, 
of 
Total 

1908  

91,682,953 

59,578,704 

65  0 

25,617,373 

28.0 

6,486,876 

7  0 

1909  

99,189,947 

64,341,781 

64.9 

27,036,705 

27.2 

7,811,461 

7.9 

1910 

94  778  348 

65  313  092 

68  9 

22515  889 

23  8 

6  949  367 

7  3 

1911  

96,860,352 

66,369,199 

68.5 

23,415,168 

24.2 

7,075,985 

7.3 

1912  

92,310,296 

62,111,916 

67.3 

23,019.633 

24.9 

7,178,747 

7.8 

1913  

89,118,410 

59,222,751 

66.4 

22,238,424 

25.0 

7,657,235 

8.6 

1914  

91.329,443 

60,793,236 

66.6 

23,109,683 

25.3 

7,426,524 

8.1 

1915  

98,283,714 

66,404,089 

67.6 

22,272,501 

22.6 

9,607,124 

9.8 

1916  

91,307,630 

57,799,310 

63.3 

22,881,663 

25.1 

10,616,657 

11.6 

1917 

80  624  484 

49  963  517 

62  0 

21  210  587 

26  3 

9  450  379 

11  7 

Average, 

1908-1917 

92,547,551 

61,189,760 

66.1 

23,331,756 

25.2 

8,026,035 

8.7 

1918... 

66,162,130 

41,909,673 

63.3 

15,695,637 

23.7 

8,556,820 

13.0 

Per   cent. 

decrease 

19  18  from 

decade 

average.  . 

Minus 

Minus 

Minus 

Plus 

28.5% 

31.5% 

41.9% 

6.6% 

U.  S.  G.  S.  Statistics. 

1  Excludes  Philippines  and  Porto  Rico. 


the  fact  that  the  cost  of  labor  is  a  larger  factor  in  the  produc- 
tion of  gold  from  siliceous  ore  than  it  is  in  the  operation  of 
placer  deposits  and  by-product  gold  would  be  produced  regard- 
less of  the  cost,  as  that  is  borne  by  the  base  metals  contained. 


538         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  is  to  be  noted,  however,  that  the  placer  output  decline  for 
1918  from  the  decade  average  is  greater  than  the  decline  of  the 
1918  siliceous  ore  output  from  the  decade  average.  It  is  diffi- 
cult to  account  for  this  in  any  other  way  than  that  labor  is  very 
difficult  to  obtain  and  that  the  economic  pressure  has  become  so 
intense  as  to  force  the  shutting  down  of  placer  operations,  and 
that  from  this  time  on  we  may  look  for  a  still  greater  curtail- 
ment of  output  from  this  source  unless  relief  is  provided. 

The  average  total  mine  output  of  gold  produced  as  a  by- 
product from  base  ores  for  the  decade  1908-1917  was  $8,026,- 
035,  and  for  1918,  $8,556,820,  an  increase  of  $530,785,  or  6.6 
per  cent.  This  increase  can  readily  be  accounted  for  by  the 
increased  production  of  base  ores  during  the  war  period. 

Referring  again  to  Chart  3,  it  will  be  observed  that  the  pro- 
duction of  by-product  gold  remains  fairly  constant  and  does 
not,  as  it  would  be  supposed,  vary  directly  with  an  increase  in 
the  production  of  base  metals.  This  is  due  to  the  fact  that  the 
large  tonnages  of  extremely  low-grade  ores  which  are  being 
worked  at  the  present  time,  and  which  have  contributed  so 
extensively  to  increase  the  base  metal  output,  do  not  contain 
but  infinitesimal  quantities  of  gold.  By-product  gold  will  never 
greatly  influence  the  total  gold  production  of  the  United  States. 
It  is  also  shown  by  Table  3  and  the  corresponding  chart  that 
gold  derived  from  siliceous  ores  contributed  66.1  per  cent. ;  gold 
produced  from  the  washing  of  placer  gravel,  25.2  per  cent.; 
and  gold  resulting  as  a  by-product  from  the  smelting  of  the 
base  ores  of  copper,  lead  and  zinc  but  8.7  per  cent,  of  the  total 
average  mine  production  of  gold  for  the  decade  1908-1917.  In 
1918,  due  to  the  rapid  decline  in  gold  output  of  siliceous  ores 
and  from  placer  gravel,  combined  with  a  less  rapid  decline  in 
the  output  of  by-product  gold,  we  find  that  siliceous  ore  gold 
supplied  in  that  year  only  63.3  per  cent.;  placer  gravel  gold, 
23.7  per  cent. ;  and  by-product  gold,  13.0  per  cent,  of  the  total 
mine  production. 

The  year  1916  records  the  high  point  in  the  production  of 
by-product  gold  at  some  $10,600,000,  which  coincides  with  a 
record  production  of  copper  in  that  year.  The  corresponding 
production  in  1918  was  about  $8,500,000,  a  decrease  of  $2,- 
100,000,  or  approximately  20  per  cent.  In  1919  there  has  been 
a  decline  in  the  base  metal  output,  and  undoubtedly  this  will 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM    539 

be  reflected  in  a  reduction  of  the  output  of  by-product  gold  for 
this  year.  It  is  safe  to  assume  that  $10,000,000  will  be  in  excess 
of  the  by-product  gold  production  for  many  years  to  come,  and 
that  this  would  become  the  maximum  of  the  gold  output  of  the 
United  States  in  the  event  that  mining  operations  dependent 
upon  gold  as  the  chief  source  of  value  were  forced  to  shut  down. 

Upon  these  facts  and  conclusions,  and  with  the  more  intimate 
knowledge  of  the  curtailment  of  tonnage  and  the  shutting  down 
of  properties  during  1919,  is  based  the  estimate  of  $55,000,000 
as  the  probable  mine  production  of  gold  for  the  United  States 
for  this  year.  Assuming  that  no  relief  is  given  the  industry 
and  that  the  same  economic  pressure  is  continuous  for  next 
year,  with  the  labor  situation  still  unsettled  and  its  consequent 
inefficiency,  it  is  estimated  that  the  gold  production  for  1920 
will  probably  not  exceed  $40,000,000,  composed  of  a  probably 
excessive  estimate  for  by-product  gold  of  $10,000,000,  together 
with  an  output  from  siliceous  ore  and  placer  gravel  of 
$30,000,000. 

It  is  evident  that  the  conditions  which  produced  the  economic 
pressure  which  has  forced  and  will  continue  to  force  a  decline 
in  the  gold  output  will,  on  the  other  hand,  be  in  favor  of  an 
expansion  in  the  jewelry  trade  and  the  volume  of  gold  con- 
sumed therein,  and  that,  therefore,  under  the  same  economic 
conditions  continuing  through  1920,  the  consumption  of  gold 
in  the  arts  probably  will  be  more  rather  than  less  than  that  of 
1919,  $65,000,000.  It  is  evident  that  there  will  be  a  shortage  of 
newly  produced  gold  to  satisfy  the  manufacturing  and  trade 
requirements  of  about  $10,000,000  for  1919  and  about  $25,- 
000,000  for  1920.  If  the  same  economic  conditions  prevail  in 
1921,  the  margin  of  deficiency  will  be  still  greater.  To  this 
extent,  therefore,  we  may  anticipate  that,  without  any  relief, 
the  monetary  reserve  would  be  withdrawn  for  manufacturing 
and  industrial  purposes,  in  the  above  stated  amounts.  Should 
the  sales  to  the  trade  be  limited  to  the  production  of  new  gold, 
as  will  certainly  be  made  effective  unless  immediate  and  con- 
structive relief  is  provided  to  increase  the  production  of  gold, 
the  trades  will  be  unable  to  satisfy  their  full  requirements  for 
those  years. 


540         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

BONUS  AND  EXCISE 

A  Proposed  Bill  to  Provide  for  an  Excise  Upon  the  Commodity  Gold  and  a 
Bonus  to  the  Producers  of  Newly  Mined  Gold 

Tentative  Preamble  of  the  Bill 

In  order  to  protect  the  monetary  gold  reserve  of  the  United 
States,  by  maintaining  the  normal  production  of  gold  within 
the  United  States  and  its  possessions,  there  shall  be  paid  to 
every  person  producing  gold  from  the  mines  within  the  United 
States  and  its  possessions,  under  the  terms  and  conditions  and 
in  the  manner  hereinafter  set  forth,  $10  per  fine  ounce  of  such 
gold  so  mined,  and  said  payments  are  to  be  made  out  of  funds 
as  herein  provided  by  an  excise  on  the  use,  manufacture  or  sale 
of  gold  in  the  United  States  for  other  than  coinage  or  monetary 
purposes,  and  from  other  funds  in  the  Treasury  not  required 
for  specified  purposes. 

While  the  general  nature  of  the  proposal  for  bonus  and  excise 
is  set  forth  in  the  tentative  preamble  above,  it  will  be  necessary 
for  the  conference  to  discuss  the  many  provisions  which  must 
be  clearly  presented  in  detail  in  the  remainder  of  the  bill. 
Following  are  some  of  the  essential  points  which  are  suggested 
for  consideration : 

1.  Amount  of  Bonus  and  Excise. — An  excise  of  50  cents  per 
pennyweight  of  fine  gold  upon  all  gold  used  for  other  than  coin- 
age and  monetary  purposes  would  be  equal  to  $10  per  fine  gold 
ounce  of  newly  produced  gold.  Based  upon  the  estimated  pro- 
duction of  new  gold  and  the  consumption  of  gold  in  the  trades 
for  1919,  the  total  bonus  to  be  paid  the  producers  would  be  one- 
half  of  $55,000,000,  or  $27,500,000 ;  while  the  total  excise  in- 
come would  be  one-half  of  $65,000,000,  or  $32,500,000,  leaving  a 
balance  in  favor  of  income  of  $5,000,000.  Inasmuch,  however, 
as  there  is  considerable  foreign  jewelry  sold  in  the  United 
States,  the  excise  income  would  be  swollen  to  the  extent  of  that 
volume  of  sales,  so  that  the  total  excise  income  would  be  large 
enough  to  allow  for  a  considerable  expansion  over  the  estimated 
production  for  1919,  and  the  Government  would  not  be  called 
upon  to  pay  the  bonus  from  funds  other  than  those  directly 
derived  from  the  excise  on  the  use,  manufacture  or  sale  of  gold 
for  other  than  coinage  or  monetary  purposes.  It  has  been 
stated  by  gold  producers  that  a  bonus  of  $10  per  ounce  will  be 
no  more  than  sufficient  to  insure  the  production  of  gold  to 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM    541 

satisfy  the  anticipated  trade  requirements  under  present  eco- 
nomic conditions. 

2.  Duration  of  Bonus  and  Excise. — During  the  war,  when 
the  bonus  measure  was  being  considered,  the  minimum  time 
period  for  which  the  relief  should  be  granted  was  expressed 
by  the  producers  as  being  five  years.    It  is  certain  that  a  period 
of  less  than  five  years  would  not  be  a  satisfactory  basis  upon 
which  to  invest  large  sums  of  money  in  the  development  of  new 
ore  reserves.    Hence  it  seems  reasonable  that  five  years  should 
be  the  time  period  for  which  the  original  bonus  and  excise  shall 
be  in  effect.    It  may  well  be  stated  that  on  and  after  five  years 
from  the  date  of  passage  the  bonus  and  excise  will  be  adjusted 
in  accordance  with  the  rise  or  fall  in  commodity  prices  as  com- 
pared with  the  average  for  the  five-year  period;  this  readjust- 
ment of  bonus  and  excise  to  be  made  each  year  and  until  such 
time  as  the  bonus  and  excise  can  be  abandoned  on  account  of 
the  restoration  of  a  price  level  which  will  satisfactorily  main- 
tain the  normal  production  of  new  gold  to  meet  all  industrial 
requirements  of  the  arts  and  trades. 

3.  Agency  of  Bonus  Payment. — The  Treasury  Department 
probably  would  be  the  best  agency  to  be  stipulated  for  the  pay- 
ment of  the  bonus  to  the  producer  of  newly  mined  gold. 

4.  Manner  of  Bonus  Payment. — Upon  the  presentation  to 
the  Treasury  Department  of  a  statement  from  the  United 
States  Mint,  verifying  the  number  of  ounces  of  newly  mined 
gold,  and  upon  the  presentation  of  a  statement  from  some  un- 
biased agency  (such  as  the  United  States  Bureau  of  Mines), 
verifying  that  the  gold  was  actually  produced  as  a  result  of 
mining  and  milling,  or  smelting,  ore,  or  washing  placer  gravel, 
payment  of  the  bonus  of  $10  per  ounce  shall  be  made  to  the 
producer  thereof.    It  is  certain  that  the  point  will  be  raised  as 
to  the  verification  of  production  on  the  assumption  that  many 
producers  will  attempt  to  pad  their  bullion  by  the  introduction 
of  old  gold,  and  it,  therefore,  becomes  necessary  to  specify  some 
independent  agency  to  serve  as  a  check  with  reference  to  the 
origin  of  the  gold  produced.    A  severe  penalty  will  have  to  be 
provided  for  persons  convicted  of  salting  newly  produced  gold 
bullion  with  old  gold.    This  procedure  will  reduce  the  possi- 
bility of  fraud  to  the  minimum,  and  at  the  same  time  insure 
justice  to  the  producer. 


542         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

5.  Agency  of  Excise  Collection. — The  Internal  Revenue 
Bureau  probably  would  be  the  best  agency  to  be  stipulated  in 
the  bill  for  collection  of  the  excise.  The  manner  in  which  the 
excise  will  be  collected  will  have  to  be  worked  out  in  detail. 
Probably  a  die  stamped  by  the  collector  upon  the  jewelry  after 
the  excise  has  been  paid  would  be  a  sufficient  safeguard.  A 
penalty  will  have  to  be  provided  for  persons  who  do  not  con- 
form to  the  excise  provisions  of  the  law. 


Comments  on  the  Bonus  and  Excise  Bill 

This  method  of  attack  is  the  most  direct  and  provides  the 
most  certain  and  rapid  protection  for  the  monetary  reserve,  by 
increasing  the  production  of  new  gold  to  satisfy  the  present 
anticipated  trade  requirements.  A  very  important  point  is  that 
it  removes  the  entire  subject  from  monetary  entanglements  and 
considerations,  since  it  deals  directly  with  gold  as  a  commodity. 
Another  point  in  favor  of  this  bill  is  that  the  consumer  of  gold 
in  the  arts  and  trades  will  be  given  the  opportunity  to  pay  what 
he  should  be  paying  to  maintain  the  industry  on  a  basis  to 
satisfy  his  own  requirements.  There  should  be  no  objection 
made  by  the  consumer  of  gold,  as  consumers  of  all  other  raw 
materials  have  been  forced  to  pay  in  many  cases  even  greater 
amounts  of  increase  than  that  specified  in  this  bill. 

An  important  advantage  of  this  proposed  bill  is  that  it  im- 
poses no  unfair  burden  upon  the  domestic  gold  manufacturer, 
since  the  foreign  manufacturer  will  have  to  pay  the  same  excise 
upon  his  finished  product.  It  also  is  uniform  in  its  application 
to  all  manufacturers  within  the  trade — the  small  and  the  big 
alike. 

In  the  operation  of  this  bill,  it  makes  no  difference  whence 
the  gold  comes  as  a  basis  for  manufacture — whether  it  be  from 
a  foreign  or  domestic  source,  or  whether  it  be  derived  from  coin 
or  old  jewelry.  Attention  may  well  be  called  to  the  fact  that, 
if  the  excise  were  placed  on  the  bullion  sold  by  the  mint  to  the 
trades,  or  a  certificate  of  sale  issued  to  the  buyers  of  gold  at 
$10  per  ounce,  in  addition  to  the  monetary  price,  there  would 
immediately  spring  up  a  speculative  market  in  old  gold,  and 
coins  would  be  destroyed  wholesale.  The  provisions  of  this 
bill  obviate  these  objections. 


A  PROPOSED  SOLUTION  OF  THE  GOLD  PROBLEM    543 

The  jewelry  trade,  by  installing  machinery  requiring  heavier 
material  to  work  upon,  has,  therefore,  found  it  cheaper  to  sub- 
stitute gold  for  labor.  Many  of  the  gold  producers  have  found 
that  it  has  cost  more  to  produce  gold  than  they  can  obtain  for 
it.  These  two  statements  confirm  the  same  fact,  but  the  jeweler 
probably  could  not  afford  to  substitute  gold  for  labor  so  freely 
if  he  paid  the  present  cost  of  its  production.  This  condition  is 
providing  a  profit  to  the  manufacturer  of  gold  to  which  he  is 
not  legitimately  entitled,  while  the  producer  of  gold  sustains  a 
corresponding  loss  which  he  cannot  continue  to  bear.  In  the 
interests  of  manufacturer  and  producer  alike,  the  two  sides  of 
this  equation  must  be  equalized.  It  seems  only  just  that  the 
manufacturers  and  other  consumers  of  gold  should  pay  the 
cost  of  production  for  their  raw  material,  while  the  producers 
of  gold  must  receive  a  sufficient  price  in  order  to  continue 
production. 


544         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  GOVERNMENT  AND  THE  GOLD  PRODUCER 

Paper  by  EUGENE  DAVIS,  of  Nevada,  Read  by  H.  N.  Lawrie  Before  the 
National  Gold  Conference 

The  precious  metal  mining  industry  has  never  received  from 
the  Government  the  consideration  to  which  it  is  entitled.  It 
has  at  no  time  occupied  an  equitable  relation  to  the  Govern- 
ment. No  well  matured,  constructive  legislation  has  been 
undertaken  in  its  behalf.  At  no  time  has  the  production  of 
gold  been  so  vitally  necessary  as  at  the  present,  and  at  no  time 
have  economic  conditions  so  alarmingly  lessened  its  production. 
With  a  trade  demand  and  consumption  considerably  in  excess 
of  the  present  annual  production  in  this  country,  not  only 
threatening,  but  actually  drawing  upon  the  reserve  held  by  the 
Government  to  protect  and  guarantee  its  financial  integrity, 
with  billions  of  bonds  outstanding,  maturing,  in  it;  and  with 
the  entire  world  seeking  in  every  conceivable  way  to  get  it 
away  from  us,  we  find  ourselves  experiencing  a  rapidly  de- 
creasing gold  production. 

Nation  Must  Pay  for  Inflation 

The  issuance  of  paper  currency  and  obligations  without  re- 
gard to  metallic  security  by  the  countries  engaged  in  the  war 
has  caused  an  inflation  so  great  and  so  far-reaching  that  the 
imagination  becomes  bewildered  in  an  attempt  to  grasp  both 
its  magnitude  and  the  consequences  which  must  certainly 
eventually  result.  That  there  will  come  a  day  of  reckoning — a 
time  when  gold  will  be  demanded  in  payment  of  the  obligations 
which  expressly  provide  that  they  shall  be  paid  in  it,  of  the 
weight,  fineness  and  value  at  the  date  of  their  creation — is  not 
susceptible  of  reasonable  doubt. 

Any  theory  of  economics  and  finance  seeking  to  escape  this 
perfectly  apparent  certainty  is  dishonest  in  its  conception  and 
will  prove  futile  in  the  fraud  it  seeks  to  perpetrate. 

The  wealth  that  has  been  created  through  centuries  of  toil 
and  preserved  by  self-denial  and  economy,  and  handed  down  to 
us  by  preceding  generations,  has  been  measured  and  fixed  by 
gold,  and  must  so  remain.  Any  serious  attempt  to  disturb  this 


THE  GOVERNMENT  AND  THE  GOLD  PRODUCER     545 

wealth  by  substituting  a  false  standard  of  values  would  bring 
about  a  cataclysm  that  would  so  disrupt  our  financial,  economic 
and  social  structures  as  to  blight  our  civilization. 

Disaster  Threatened  If  Gold  Fails 

It  is  impossible — it  is  unthinkable ! 

When  the  day  of  reckoning  dawns,  those  countries  possessing 
gold  will  survive  and  prosper.  Moral  and  commercial  deca- 
dence will  come  to  those  which  repudiate  or  cannot  pay. 

A  British  treasury  official  was  recently  quoted  as  having  said 
that  eight  billion  dollars  of  credit  must  be  furnished  the  Allies 
within  the  next  twelve  months  to  overcome  the  evils  of  paper 
money  issues.  Since  our  country  is  the  only  one  capable  of 
granting  credits  in  such  tremendous  amounts,  it  is  evident  that 
we  must  carry  a  large  part  of  the  financial  burdens  of  those 
countries  until  their  industrial  reorganization  shall  have  been 
perfected  and  placed  on  the  solid  productive  footing. 

Can  any  stronger  proof  be  offered  of  the  fact  that  an  in-, 
creased  gold  production  in  this  country  is  a  necessity?  The 
entire  world  is  looking  to  us  for  assistance,  and  we  must  give 
it  to  the  limit  of  our  ability.  To  do  so  we  must  maintain  the 
largest  possible  gold  reserve  that  our  own  credit  be  not  im- 
paired and  our  financial  integrity  be  kept  beyond  the  possibility 
of  question  or  suspicion. 

Ample  Gold  If  Production  Encouraged 

Since  gold  was  first  adopted  by  England  as  the  sole  unit  of 
monetary  measurement  in  the  early  part  of  the  nineteenth  cen- 
tury, there  never  has  until  now  entered  into  the  price  of  gold 
the  problem  of  the  cost  of  production.  Necessity  has  never 
before  forced  the  issue  that  Government  price  fixation  cannot 
long  nullify.  The  law  of  supply  and  demand  applies  as  well  to 
gold  as  to  any  other  commodity ;  because  of  the  arbitrary  price 
Which  has  been  fixed  on  the  gold  ounce,  we  are  now  confronted 
by  a  too  limited  volume  to  supply  the  ever  increasing  demand 
and  rapidly  intensifying  necessity.  At  the  same  time  the  pro- 
duction is  decreasing  with  alarming  rapidity.  There  is  ample 
gold  in  this  country  to  meet  all  requirements  and  to  maintain 
our  present  pre-eminent  financial  position  in  the  world,  if  con- 
ditions under  which  it  can  be  mined  at  a  reasonable  profit  are 


546         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

created.  Such  conditions  can  be  had  only  by  the  enactment  of 
suitable  legislation,  which  must  be  just  to  the  gold  producer 
and  fair  to  the  public.  The  economic  pressure  which  has  prac- 
tically paralyzed  the  gold  industry  must  be  overcome  so  far  as 
it  is  affected  thereby. 

Admitting  that  the  problem  is  complex  and  presents  many 
seemingly  insurmountable  difficulties,  necessity  nevertheless 
compels  a  solution.  Upon  its  solution  depends,  to  a  very  great 
extent,  the  settlement  of  the  grave  questions  underlying  our 
economic  difficulties.  There  is  no  other  cure  for  the  inflation 
which  is  dangerously  fermenting  the  minds  of  the  people  and 
causing  the  wave  of  discontent  and  rebellious  feeling  so  preva- 
lent all  over  the  land.  Theorists  may  theorize,  economists  may 
specialize  and  financiers  may  contrive  temporary  expediences, 
but  we  will  still  face  the  great  big  dominating  fact  that  no 
permanent  settlement  of  the  evils  with  which  we  are  now  beset 
is  possible.  And  the  grave  dangers  of  the  future  cannot  be 
safeguarded  against  until  a  wise  solution  of  the  gold  question 
is  found.  Preparation  for  the  day  of  reckoning  must  be  made, 
and  it  can  only  be  done  by  increasing  the  production  of  gold  to 
the  utmost  ounce. 

Protect  National  Credit 

If  we  are  to  maintain  financial  pre-eminence  throughout  the 
world,  our  dollars  must  perform  their  functions  without  the 
shadow  of  discredit  in  the  most  remote  port  as  certainly  as  they 
will  at  home.  To  do  this  they  must  be  dollars  in  fact,  and  un- 
alloyed with  Government  fiat.  Gold  only  can  make  this  possible. 

While  I  am  giving  but  feeble  emphasis  to  the  necessity  of 
increased  gold  production,  I  wish  to  sound  a  warning  against 
those  misguided  or  false  so-called  economists  and  prophets  who 
would  have  us  believe  that  there  is  already  too  much  gold ;  that 
its  continued  use  as  the  basis  of  credit,  as  a  standard  of  value, 
or  as  security  for  circulating  medium  and  a  medium  of  ex- 
change is  nothing  less  than  the  continuance  of  a  fiction,  and 
therefore  quite  unnecessary. 

British  Call  for  Gold 

The  call  of  England  for  a  credit  to  the  Allies  of  eight  billion 
of  dollars  within  the  next  twelve  months  with  which  to  over- 


THE  GOVERNMENT  AND  THE  GOLD  PRODUCER     547 

come  the  evils  of  paper  money  issued  during  the  war,  to  meet 
desperate  situations,  is  sufficient  answer  to  everyone  offering  a 
substitute  for  the  gold  standard  of  money.  It  required  thou- 
sands of  years  of  progressive  endeavor  to  lay  the  foundation 
and  create  the  great  financial  and  credit  structure  which  han- 
dled the  business  and  commerce  of  the  world  with  facility  and 
safety  before  the  war.  During  the  war  story  upon  story  was 
added  to  the  structure,  in  the  form  of  forced  credit,  until  the 
foundation  is  totally  inadequate  to  longer  carry  the  credit 
superstructure  with  safety.  The  foundation  must  be  widened 
and  the  structure  braced  with  supporting  additions  that  it  may 
not  be  blown  over  by  the  first  wind  of  wavering  confidence. 
This  can  be  done  only  with  additional  gold.  Every  man  who 
thinks  straight  financially — who  placed  the  sacredness  of  cre- 
ated obligations  ahead  of  the  mere  possession  of  dollars— must 
admit  the  necessity  of  increased  gold  production.  The  fact  was 
recognized  by  many,  more  than  a  year  ago,  and  a  movement 
was  started  to  obtain  sufficient  relief  for  the  gold  miners  to 
stimulate  its  production.  The  effort  failed  and  production  has 
continued  to  decline  while  the  necessities  for  more  gold  have 
multiplied.  The  problem  is  now  so  acute  and  of  such  vital  im- 
portance that  its  solution  can  no  longer  be  deferred  without 
courting  disaster,  both  to  the  financial  world  and  the  gold 
mining  industry. 

How  is  the  necessary  increase  of  gold  production  to  be  pro- 
cured? Because  of  the  increased  cost  of  production  it  can  only, 
in  exceptional  cases,  or  where  it  is  obtained  as  a  by-product,  be 
mined  at  a  profit.  Hence,  no  prospecting  or  development  work 
is  being  done.  This  means  a  far  greater  decrease  in  production 
in  the  near  future  than  has  so  far  taken  place.  The  high  price 
of  silver  has  turned  the  attention  and  energies  of  mining  men 
generally,  as  well  as  capital,  to  the  mining  of  the  white  metal. 
Nowhere,  so  long  as  the  present  economic  pressure  endures, 
can  be  seen  any  well  founded  hope  for  improvement  in  the  gold 
situation,  unless  suitable  legislation  be  speedily  enacted  to 
make  possible  its  production  at  a  reasonable  profit  to  the  miner. 

The  value  of  gold  as  measure  of  values,  as  a  money  metal, 
the  basis  of  credit  and  a  medium  of  international  exchange, 
cannot  be  changed  without  bringing  to  earth  the  financial  and 
credit  structure  of  the  world.  It  must  follow  that  the  price  of 
gold,  as  fixed  by  law,  should  not  be  changed. 


548         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Production  Ceasing 

The  gold  mines  cannot  continue  production  at  a  loss.  Many 
of  them  have  closed.  Others  must  close  before  legislation  can 
be  had,  and  the  industry  will  soon  be  practically  paralyzed  if 
assistance  is  not  quickly  provided.  The  only  hope  lies  in  obtain- 
ing suitable  legislation,  the  object  and  purpose  of  which  should 
be  to  give  such  relief  to  gold  miners  as  will  make  certain  the 
preservation  of  the  mines  now  opened  and  so  stimulate  the 
industry  as  to  make  possible  the  development  and  operation  of 
new  mines  at  a  profit,  to  the  end  that  production  may  be  suffi- 
ciently increased  as  to  at  least  meet  the  annual  requirements  of 
the  trade. 

Regarding  this  as  a  temporary  expedient  necessary  for  the 
protection  and  preservation  of  both  the  industry  and  the  gov- 
erning gold  reserve,  very  carefully  matured  constructive  legis- 
lation should  be  pressed  until  the  industry  shall  have  been 
placed  in  equitable  relation  to  the.  Government,  and  upon  a 
sound  and  enduring  basis.  An  excise  tax  on  all  gold  used  by 
the  trade,  the  proceeds  of  which  shall  be  paid  to  the  producers 
of  new  gold,  offers,  in  my  opinion,  a  temporary  expediency  of 
more  merit  than  any  proposal  so  far  advanced.  Coupled  with 
this  should  be  the  elimination  of  all  taxes  levied  upon  the  pro- 
duction of  gold;  upon  all  profits  derived  therefrom,  and  upon 
all  incomes  derived  from  investments  in  gold  mining.  Other 
industries  have  obtained  relief  and  protection  through  organi- 
zation. Last  year  the  gold  miners  passed  resolutions  and 
organized,  but  failed  to  press  their  case  at  the  psychological 
moment — they  ignored  The  American  Mining  Congress,  the 
only  efficient  fighting  organization  the  mining  interests  of  the 
country  has  ever  had.  The  movement  was  an  ignominious 
failure  and  should  serve  as  a  warning  now  and  in  the  future. 
Whatever  is  undertaken  should  be  done  through  the  Mining 
Congress,  with  which  we  should  heartily  co-operate  and  to 
which  we  should  give  our  support  to  any  necessary  extent. 

A  committee  composed  of  the  ablest  men  in  the  gold  industry 
should  be  appointed  and  instructed  to  prepare  a  bill  or  bills  to 
be  introduced  in  Congress,  which  will  serve  to  meet  the  necessi- 
ties of  the  situation  until  such  time  as  comprehensive,  con- 
structive legislation  may  be  matured  to  put  the  industry  where 
its  importance  as  a  preferred  essential  industry  demands  that 


THE  GOVERNMENT  AND  THE  GOLD  PRODUCER     549 

it  should  stand.  Let  it  not  be  forgotten  that  when  Europe 
cried  aloud  for  bread  it  was  not  difficult  for  Congress  to  find 
a  way  of  stimulating  the  production  of  wheat  to  meet  the 
necessities. 

Increase  Necessary  for  Stabilizing  Finance 

Now,  increased  production  of  gold  is  as  important  to  the 
stability  of  finance,  the  maintenance  of  accumulated  values, 
continued  industrial  prosperity — and  through  them  the  preser- 
vation and  unbuilding  of  our  social  fabric — as  was  wheat  when 
the  physical  life  of  European  peoples  was  threatened  by  famine. 
Congress  acted  within  its  rights  and  powers  then,  notwith- 
standing that  our  hundred  million  people  had  to  bear  the 
resulting  increased  cost  of  living,  that  Europe  might  have 
bread.  It  has  the  same  right,  and  it  is  no  less  its  duty,  to  pro- 
tect our  national  credit  and  take  steps  to  prevent  a  financial 
cataclysm  which  would  engulf  and  destroy  values  and  industry 
to  an  extent  that  would  spread  ruin  throughout  the  world. 

The  proposed  excise  tax  on  gold  used  in  the  trade  would  fall 
upon  those  who  have  the  means  to  pay  the  increased  cost  of  pro- 
ducing gold,  while  its  increased  production  would  serve  as  an 
insurance  to  all  of  the  people  against  financial  disaster. 


550         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


WAR  MINERALS  RELIEF  COMMISSION 

Statement  of  HON.  PHILLIP  N.  MOORE,  of  the  War  Minerals  Relief 

Commission,  Before  the  War  Minerals  Conference  of  The  American 

Mining  Congress,  St.  Louis,  Mo. 

Following  the  statement  of  Mr.  Callbreath  and  the  argu- 
ment of  my  distinguished  chief,  I  am  much  at  a  loss  to  know 
just  what  line  may  interest  you  further. 

I  come  to  you  this  evening  by  instruction,  speaking  to  old 
and  many  who  I  hope  may  become  new  friends,  but  in  view  of 
some  of  the  cordial  words  which  have  been  uttered  in  the  last 
months,  regarding  the  actions  and  inactions  of  the  committee 
of  which  your  speaker  is  a  small  part,  with  the  feeling  that  he 
has  not  met  unanimous  approval. 

It  sadly  penetrates  his  conscience  that  this  body  of  serious 
men  whom  he  respects  and  is  endeavoring  to  serve  have  come 
together  to  voice  their  dissatisfaction  with  legislation  govern- 
ing the  Commission,  with  legal  opinions  which  are  mandates, 
and  with  rulings  for  which  said  Commission  alone  is  responsible. 

Regarding  those  rulings,  I  will  not  repeat  the  arguments  of 
my  chairman;  I  consider  that  they  are  unanswerable,  but  I 
have  thought  possibly  a  few  details  of  the  history  from  a  little 
different  angle  of  events  which  led  up  to  this  war  minerals 
situation  might  be  worth  bringing  to  your  attention. 

Let  us  go  back  to  the  foundation  of  events,  on  which  has 
been  built  a  structure  of  effort  and  patriotic  sacrifice,  with,  it 
appears,  a  thrifty  proportion  of  business  motive. 

Early  after  the  entry  of  the  United  States  upon  the  late 
war  patriotic  citizens  were  called  or  hastened  to  Washington 
to  volunteer  their  services ;  to  offer  their  skill  and  experience 
toward  quick  and  ordered  mobilization,  for  war,  of  the  re- 
sources of  our  land. 

Selfish  Interests  Dominant 

It  was  perhaps  unfortunate  that  many  able  and  successful 
citizens  (captains  of  industry)  while  so  serving  never  were 
quite  big  enough  to  divorce  their  own  interests  and  look  at  the 


WAR  MINERALS  RELIEF  COMMISSION  551 

problems  of  supply  from  a  national  standpoint.  Too  often  such 
men,  fully  competent  to  think  broadly  and  patriotically  on  all 
other  matters,  when  their  own  industry  came  to  face  sacrifice 
to  national  needs  were  unable  to  bury  self-interest. 

It  is  possible  that  some  men  wise  in  the  markets  of  the 
minerals  most  acutely  needed,  importers  by  habit  and  profit, 
were  of  this  class  and  lacked  realization  of  the  imminent 
danger  of  industrial  starvation  and  failure  of  military  sup- 
plies which  might  accrue  through  scarcity  of  shipping. 

Mining  Industry  Responded 

Others  there  were,  however,  and  of  them  I  speak  with 
pride — officers  of  our  Bureau  of  Mines  and  Geological  Survey, 
broad-minded  mining  engineers,  mine  operators  and  State 
geologists — who  quickly  saw  the  peril  and  addressed  them- 
selves to  a  campaign  for  awakening  officials  and  public  to 
the  instant  need  of  studying  and  developing  our  domestic 
supplies  to  a  point  of  national  safety. 

For  this  purpose  the  mining  profession,  instead  of  seeking 
organization  to  work  independently,  as  so  many  other  bodies 
of  men  had  done,  sought  and  gained  articulation  with  the 
established  Government  agencies,  the  Geological  Survey  and 
Bureau  of  Mines. 

Duplication  Caused  Confusion 

Resolutely  resisting  all  attempts  of  ambitious  patriots  to 
initiate  independent  movements,  they  held  to  the  one  organiza- 
tion. Later,  it  must  be  regretfully  said,  national  committees 
organized,  for  specific  industrial  lines  of  activity  failed  to 
recognize  the  vital  importance  of  similar  teamwork,  but  estab- 
lished bureaus  of  mineral  investigation  of  their  own,  to  the 
duplication  of  effort,  confusion  of  counsel,  and  later  to  clashes 
of  jurisdiction,  which  were  costly.  Heading  these  were  some 
of  the  influential  men  of  the  profession  as  well  as  gentlemen 
possessing  a  vast  ignorance  of  mining  affairs. 

Government  Stimulation 

Following  upon  the  organization  of  the  War  Minerals  Com- 
mission a  nation-wide  statistical  and  stimulation  campaign 
was  inaugurated,  with  the  object,  first,  of  learning  exactly 


552         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

what  were  the  possibilities  for  domestic  production  of  the 
most  needed,  hitherto  imported  minerals,  and,  second,  to 
stimulate  the  output  of  such  minerals  as  could  be  produced  at 
a  non-prohibitive  cost.  The  cost  of  this  work  was  borne  by 
the  Geological  Survey  and  the  Bureau  of  Mines. 

Original  War  Minerals  Bill 

Recognizing  that  something  beside  indefinite  appeals  to  the 
patriotism  of  the  producers  would  be  necessary,  the  War 
Minerals  Committee,  a  board  representing  the  official,  semi- 
official and  national  societies  of  the  mining  profession,  pre- 
pared and  had  introduced  a  bill  designed  to  give  to  a  properly 
constituted  governmental  authority  power  to  contract  for  and 
to  control  the  needed  minerals.  It  was  adapted  from  the  Food 
Administration  law  and  proposed  to  give  to  an  administrator 
practically  the  same  control  over  minerals  that  the  Food 
Administrator  had  over  edibles.  It  was  the  belief  of  the  gen- 
tlemen who  drafted  this  bill  that  the  surest  and  quickest 
results  would  come  through  giving  control  over  the  entire 
industry  to  a  properly  constituted  adminstrator.  Immediately, 
however,  arose  storms  of  protest  from  the  well-established 
industries  at  what  they  termed  "interference  with  their  busi- 
ness," and  a  back-fire  was  started  against  the  proposal. 

It  quickly  appeared  that  the  large  established  industries 
carried  sufficient  power  to  defeat  any  measure  which  affected 
them.  They  further  alleged  with  much  show  of  reason  that 
there  was  no  probable  scarcity  of  raw  materials  used  by  them. 

The  bill  was  quickly  amended,  omitting  those  minerals  of 
which  there  would  evidently  be  no  scarcity,  and  its  passage 
again  supported. 

Mining  Congress  Opposed 

If  the  Mining  Congress  ever  lent  its  active,  enthusiastic 
support  to  this  bill,  it  has  failed  to  come  to  the  knowledge  of 
this  speaker ;  on  the  contrary,  a  gentleman  introducing  himself 
as  a  director  and  vice-president  of  the  Mining  Congress  before 
the  House  committee  having  this  bill  in  hand  testified  as  fol- 
lows, quoting  from  the  stenographic  report:  "I  wish  to  say, 
not  that  I  am  authorized  to  say  it  by  the  Board,  but  as  repre- 
senting the  views  of  the  Western  mining  interests  and  mem- 


WAR  MINERALS  RELIEF  COMMISSION  553 

bers  who  are  associated  or  connected  with  that  Congress,  that 
the  bill  in  many  respects  is  opposed  to  their  views." 

Later  the  same  gentleman  stated:  "That  certain  repre- 
sentations had  been  made  on  behalf  of  The  American  Mining 
Congress  which  you  might  say  were  practically  opposed  to  the 
views  of  the  Western  members  of  that  Congress.  I  felt  it  was 
my  duty,  as  an  officer  and  director  in  that  association,  to  cor- 
rect that  impression  in  some  degree  here." 

A  vigorous  protest,  the  first  and  perhaps  most  vigorous, 
against  the  passage  of  that  bill  came  from  a  State  Chapter  of 
The  Mining  Congress,  a  member  of  which,  representing  himself 
officially,  however,  as  speaking  for  a  State  mining  organization 
and  not  of  the  Mining  Congress,  appeared  in  Washington,  in 
attendance  upon  the  hearings  of  the  Senate  Committee,  as  a 
constant  and  vigorous  opponent  of  the  measure. 

It  is  just  as  well,  gentlemen,  to  have  these  things  clear. 
They  are  serious  facts  which  we  will  do  well  to  remember. 

It  is  needless  to  go  further  into  the  history  of  that  much- 
debated  measure,  which,  losing  hearty  support  from  sources 
which  it  had  a  right  to  expect,  unexplainedly  fell  into  the 
legislative  doldrums  to  become  a  law  only  in  October,  little 
more  than  a  month  before  the  end  of  the  war.  The  history 
of  this  opposition  never  has  been  printed.  It  is  not  within  my 
power  nor  my  purpose  to  enlarge  upon  it. 

Coming  into  effect  at  the  end  of  October,  the  law  was  too 
late  to  be  of  any  value  to  the  industry ;  so  late  that  the  Secre- 
tary of  the  Interior,  who  was  appointed  to  administer  it,  de- 
clined to  exercise  its  powers. 

Price  Stimulation 

Under  the  stimulus  of  high  prices,  accompanied  by  a  vigor- 
ous campaign  intended  to  advertise  the  need  of  great  supplies 
of  certain  minerals,  as  well  as  a  tempting  promise  of  rich 
profits  apparently  certain  under  high  prices,  development  of 
these  minerals  grew  by  leaps  and  bounds,  until  the  tonnage 
produced  exceeded  all  expectations.  Meantime,  in  the  councils 
of  national  committees,  self-interest  and  narrow-mindedness, 
if  no  worse,  warped  judgments  which  should  have  been  clear 
and  permitted  importations  in  violation  of  serious  promises 
made  by  authorized  Governmental  Boards.  A  collapse  of 


554         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

prices  started  weeks  before  the  end  of  the  war,  terminating  in 
practical  suspension,  which  obtains  to  the  present  time. 

It  is  needless  to  discuss  details  of  this  collapse,  I  might  have 
said  this  mercenary  collapse.  Its  existence  is  only  another 
proof  of  the  inability  of  men  who  think  themselves  patriotic 
to  turn  aside  from  the  contemplation  of  their  own  business 
interests. 

Relief  Legislation 

Following  the  cessation  of  the  war  and  the  collapse  of  the 
demand,  men  who  suffered  thereby  all  over  the  country,  by 
concerted  effort,  brought  to  bear  opinion  upon  Congress  to 
secure  remedial  legislation.  The  detail  of  this  legislation  has 
been  given  you  by  my  chairman. 

It  is  sufficient  that  it  is  here ;  you  know  it,  we  know  it ;  we 
as  a  Commission  of  sincere  men,  endeavoring  to  do  justice  and 
avoid  imposition,  have  before  us,  first,  a  statute,  the  intent 
of  which  is  clear;  which  is  to  render  awards  and  not  bounties, 
to  make  even,  as  far  as  may  be  within  their  legal  power,  the 
net  losses  which  have  been  suffered  by  claimants  as  the  result 
of  patriotic  efforts  made  by  them  by  request  of  a  properly 
authorized  representative  of  the  Government.  The  details  of 
this  you  have  heard  from  our  chairman. 

What  Does  Law  Demand? 

It  is  to  be  noted,  however,  that  this  Board  feels  that  the 
last  and  most  imperative  order  of  the  bill  is  that  which  author- 
izes the  secretary  to  make  awards  which  are  just  and  equitable. 
What  does  this  mean?  Does  it  mean  that  a  man  may  make 
a  profitable  deal  in  one  organization  or  in  one  operation,  hide 
that  and  bring  his  losses  in  other  operations  to  the  Commission 
for  award?  Does  it  mean  that  a  man  under  the  stress  of  the 
war  and  the  opportunity  then  appearing  of  probable  great 
profits  may  revive  an  "old  skate"  of  a  mine,  which  he  has 
warned  himself  fruitlessly  against  in  the  past,  and  failing, 
present  a  righteous  demand  to  the  Commission  that  his  re- 
newed losses  be  cared  for?  Does  it  mean  that  efforts  which 
are  purely  and  absolutely  business  transactions,  or  entered 
into  with  mixed  motives,  patriotism  as  well  as  hope  of  gain, 
should  be  taken  as  all  patriotism  and  the  results  of  Govern- 
ment stimulation? 


WAR  MINERALS  RELIEF  COMMISSION  555 

Rulings  on  Technical  Points 

And  what  does  commercial  importance  mean?  If  you  will 
pardon  me,  I  will  give  the  definition  of  commercial  importance 
on  which  this  Commission  has  agreed,  and  which  we  will  be 
very  glad  to  have  you  criticise. 

They  construe  a  deposit  of  commercial  importance  to  be  one 
carrying  ore  in  sufficient  quantity  and  of  sufficient  richness, 
to  have  been  capable  of  working  at  a  profit  under  the  condi- 
tions of  the  war  and  for  the  period  of  the  war,  reasonably  to 
be  expected  at  the  time  when  the  enterprise  was  undertaken. 
If  you  can  suggest  anything  fairer  than  that,  we  shall  be  very 
glad  to  have  it. 

With  this  definition  we,  of  course,  charge  the  operation  with 
war  costs,  but  we  give  the  benefit  of  war  prices,  and  generally 
speaking,  depending  upon  the  date  of  entry,  we  assume  that 
the  expected  period  of  the  war  when  it  was  undertaken  was 
two  years.  In  other  words,  if  the  claimant  can  show  us  that 
he  lost  money  on  a  property  which  gave  a  fair  probability  of 
having  worked  itself  out  to  a  profit  within  two  years  of  the 
time  it  was  undertaken,  we  consider  that  that  is  a  commercial 
proposition  within  the  meaning  of  the  law. 

Again,  we  realize  that  what  may  be  a  commercial  proposition 
for  a  couple  of  prospectors  out  in  the  hills,  where  they  can  dig 
out  a  few  carloads  of  chrome  without  any  capital  expenditure, 
would  be  absolutely  an  uncommercial  proposition  for  a  capi- 
talist to  build  a  mill  upon  or  attempt  to  reach  it  with  a  rail- 
road. Those  things  are  relative  to  all  cases  and  it  is  our  sincere 
desire  to  hold  them  so. 

Now,  once  more,  another  point  wherein  we  tried  to  discrimi- 
nate. We  treat  each  claimant  as  an  individual.  We  do  not 
hesitate  to  go  behind  a  corporation's  operations  wherein  he 
was  a  large  part  and  wherein  he  may  have  profited  or  lost.  It 
is  the  individual  we  are  after  all  the  time. 

The  chairman  has  already  pointed  out  to  you  that  we  do  not 
consider  an  individual  has  the  right  to  select  losses  and  forget 
his  gains.  On  that  point  there  seems  not  much  discussion. 

Types  of  Claims 

Claims  which  have  come  to  us  are,  many  of  them,  of  a 
nature  which,  were  we  not  cheerful  optimists,  might  lead  us 


556         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

into  the  depths  of  pessimism.  I  wish  you  gentlemen  could  sit 
at  a  few  hearings  with  us.  The  claimant  sits  across  the  table 
with  a  claim,  we  will  say  (I  am  not  going  to  give  you  figures, 
I  do  not  want  to  identify  the  man),  for  $50,000.  He  entered 
this  enterprise  perhaps  in  1916,  before  the  war;  he  may  have 
(I  am  making  a  composite  example)  included  the  price  of  a 
mill  erected  before  the  war.  He  certainly  has  the  price  of  his 
property.  I  say  to  him:  "Now,  you  have  included  in  this, 
Mr.  Blank,  everything  you  have  spent  on  the  property — the 
cost  of  your  mill,  your  road,  the  money  you  lost  in  operation ; 
you  think  yon  have  a  good  mine,  don't  you  ?"  "Oh,  gentlemen, 
I  have  one  of  the  best  mines  in  the  State !"  "Do  you  expect  to 
stay  with  it?''  "Oh,  yes;  I  think  as  soon  as  the  market 
improves  we  are  going  to  do  better!"  "Do  you  realize,  if  by 
any  chance  the  Commission  should  recommend  your  entire  claim 
for  award,  that  your  equity  should  pass  to  the  Government 
and  you  would  cease  ownership?  Is  that  what  you  want?" 
"Oh,  no,  we  don't  want  that !"  "Then  tell  us  what  you  think 
would  be  a  fair  allowance."  "Well,  I  don't  know;  that  is  for 
the  Commission  to  say."  "Well,  the  Commission  has  1,200 
cases.  Tell  us  what  you  think."  One  man  after  initially 
claiming  $50,000  finally  said  that  he  thought  about  $5,000 
was  a  fair  award.  Another  (we  will  assume  again  a  composite 
case)  gentleman  came  before  us  with  a  claim  for  many  thou- 
sands of  dollars.  He  admitted  that  he  had  a  plan  long  before 
he  received  any  Government  stimulation;  he  stated  that  the 
enterprise  looked  good  to  him  and  he  thought  he  was  doing  a 
patriotic  service,  but  claims  when  he  received  Government 
stimulation  that  he  largely  increased  his  investment  and, 
therefore,  was  entitled,  at  least,  to  the  increase,  although  the 
claim  as  originally  made  asked  for  every  dollar  invested  in  the 
property.  The  claimant  was  asked:  "How  did  you  come  to 
increase?"  He  replied:  "Well,  Mr.  Jones,  of  the  Bureau  of 
Mines,  told  us  to;  that  the  Government  needed  this  mineral 
and  we  ought  to  get  it.  'Now,  hurry  it  up';  so  I  decided  to 
double  the  mill."  We  called  Mr.  Jones  and  said:  "Mr.  Jones, 
what  happened  between  you  and  Mr.  Smith  ?  Did  you  see  that 
property?"  "Yes!"  "When  did  you  see  it?"  "In  August, 
1918."  "What  happened  between  you?"  "Well,"  he  said,  "I 
landed  at  his  place  one  day  about  11  o'clock.  He  had  just 


WAR  MINERALS  RELIEF  COMMISSION  557 

got  in  from  New  York  with  some  of  his  new  stockholders.  I 
went  up  to  the  mine  to  meet  him  and  shook  hands  with  him ; 
asked  him  what  he  was  doing.  Said  I  was  out  there  for  the 
Bureau  of  Mines  to  see  what  the  prospects  of  production  were. 
He  said :  'I  am  busy  now ;  you  go  down  to  the  boarding-house. 
I  have  to  go  away  at  half -past  two,  but  I  will  see  you  when 
I  come  down.'  "  Jones  met  the  gentleman,  who  told  him  his 
plans,  of  the  great  mill  he  was  going  to  build,  the  pipe  line  he 
would  lay  and  the  developments  he  would  make. 

Now,  what  would  you  do  with  a  claim  like  that  ?  Should  we 
give  him  his  thousands  of  dollars  on  the  ground  of  Government 
stimulation  ? 

Assayer  Wanted  Salary  Paid 

Here  is  another  claim:  (I  could  keep  you  all  day  on  this, 
gentlemen,  but  I  will  not  bore  you  too  long.)  A  gentleman  in  a 
well-known  mining  centre,  not  too  well  equipped  with  technical 
talent,  thought  it  would  be  a  good  idea  to  establish  a  chemical 
laboratory  there,  where  the  developers  could  get  their  deter- 
minating work  done  actively.  He  set  up  a  laboratory,  and  in 
about  six  months  he  sent  us  a  claim  beautifully  prepared,  the 
vouchers  for  every  cent  that  he  expended  for  supplies  or  equip- 
ment, adding  at  the  end  of  each  month  $150  for  his  services, 
and  at  the  end  credited  his  account  with  $219,  the  total  receipts 
for  the  six  months.  In  answer  to  the  questionnaire  "What 
salvage?"  he  wrote  "No  salvage  at  all;  the  bank  took  the 
salvage  for  a  note."  What  shall  we  do  with  a  case  like  that, 
gentlemen  ? 

Wants  Pay  for  Scenery 

Here  is  another.  "City  of  Winivesta,  Somewhere  or  Other, 
Office  of  the  City  Manager — Secretary  of  the  Interior,  War 
Minerals  Relief,  Washington,  D.  C.:  We  wrote  you  a  few 
days  since,  and  now  we  have  a  bulletin  from  the  State  Mining 
Bureau  advising  us  to  write  you  stating  briefly  our  claim  for 
loss  due  to  the  fall  in  the  price  of  pymanchro  ore.  At  the 
early  request  of  Mr.  Blank,  head  of  the  United  States  Mining 
Bureau,  we  built  a  short  railroad  and  mined  a  boulder  of  ore 
which  was  on  the  city  property  in  our  park.  The  city  has 
still  due  it  some  ten  thousand  dollars  for  ore,  which  the  Blank 


558         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Steel  Company  had  purchased  but  were  unable  to  pay  for  on 
account  of  the  drop  in  the  price  of  ore.  This  company  is 
now  in  the  hands  of  a  receiver,  and  we  feel  the  city  is  deserv- 
ing of  ten  thousand.  We  have  had  to  cut  our  police  force,  and 
we  feel  we  are  entitled  to  our  claim.  Trusting  this  will  meet 
with  your  approval,  and  that  you  will  be  able  to  allow  us  relief, 
I  am,  very  truly  yours,  Blankety-blank,  City  Manager." 
[Laughter.] 

Gentlemen,  if  you  could  but  read  with  us  for  a  week,  I  think 
you  would  be  more  charitable,  some  of  you  at  least,  in  your 
criticisms  of  our  interpretations. 

Commission  Regrets  Criticism 

Now,  let  us  go  on — enough  for  our  troubles.  You  came  here 
supposedly  to  discuss  your  own  and  not  ours. 

The  point  was  well  taken,  and  I  desire  to  thank  Mr.  Lloyd 
for  it — that  the  criticism  here  should  discriminate  between  the 
Commission  and  the  law.  The  Commission  regrets  greatly 
the  criticism  of  old  friends  and  it  hopes  to  avoid  that  of  new ; 
but  when  you  come  to  a  question  of  amending  this  statute, 
how  are  you  going  to  amend  it  and  not  make  the  blue  sky 
your  limit? 

We  have  been  doing  our  best,  so  far  as  our  authority 
extended,  to  stretch  the  blanket  of  interpretation  over  those 
cases  we  felt  to  be  just.  After  all,  there  is  something  in  the 
papers  and  the  testimony  in  the  case  whereby,  when  we  get 
close  down  to  it,  we  are  pretty  apt  to  tell  whether  a  man  is 
trying  to  put  it  over  on  us  or  not.  We  have  been  trying  to 
stretch  that  blanket  all  we  could  honestly  and  intelligently  and 
within  the  law ;  but  if  you  will  pull  that  blanket  clear  off  and 
make  the  sky  the  limit — if  you  say  that  any  man  who  has  read 
a  circular  of  the  Interior  Department,  or  any  of  these  depart- 
ments in  that  propaganda,  and  then  went  out  on  his  way 
searching  for  a  property  which  made  a  loss,  can  come  in — your 
sixteen  million  will  never  begin  to  touch  the  losses  which  will 
be  asked  for. 

Changes  Needed  in  Law 

I  confess  I  am  as  yet  at  a  loss  to  know  what  to  advise. 
The  Commission  hopes  before  its  work  is  completed  that 


WAR  MINERALS  RELIEF  COMMISSION  559 

the  matter  may  so  clear  itself  that  they  can  recommend 
changes  which  will  open  the  door  wider  for  justice  and  shut 
it  against  imposition.  Such  changes  in  both  directions  are 
needed. 

Under  present  rulings  the  Commission  doubtless  has  to 
reject  some  righteous  claims  and,  through  compliance  with  the 
form  of  the  law,  may  allow  some  which  have  no  equity,  which 
were  not  due  to  patriotism  but  to  business  motive,  but  it  will 
do  so  because  there  seems  no  alternative  under  the  law. 

Our  desire  is  to  do  justice  and  prevent  imposition.  We  hope 
in  the  midst  of  criticism  and  disappointment  you  will  believe 
this.  Believe  also  that  the  Commission  will  be  at  all  times 
glad  to  receive  constructive  suggestions  for  the  future. 


560        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


BUSINESS  TRAINING  IN  MINING  AND  METALLURGICAL 

CURRICULA 

By  DR.  L.  E.  YOUNG,  Heat  Engineer,  Union  Electric  Light  and  Power 
Company,  St.  Louis,  Mo. 

(Presented  at  National  Conference  of  Schools  of  Mines  of  The  American 

Mining  Congress) 

During  the  past  few  years  there  has  been  considerable  dis- 
cussion of  the  value  of  training  in  economics  for  students  in 
engineering.  There  seems  to  be  a  question  in  the  minds  of 
some  faculty  members  as  to  the  advisability  of  including  such 
subjects  as  economics,  accounting,  business  law,  and  business 
organization  in  an  undergraduate  curriculum  in  mining  or 
metallurgy. 

Need  for  Business  Training 

The  most  recent  catalogue  of  an  institution  of  first  rank  in 
describing  the  curriculum  in  mining  engineering  states  that : 

The  object  of  the  course  is  primarily  to  train  a  student  for 
practice  in  the  field  of  mining  engineering.  It  is  designed  to 
give  him  the  thorough  fundamental  training  of  an  engineer  and 
a  breadth  of  education  that  will  enable  him  readily  to  under- 
take work  in  the  various  lines  of  engineering  which  frequently 
present  themselves  to  one  of  his  profession.  The  course,  there- 
fore, when  completed,  places  the  graduate  in  the  path  of  a  large 
number  of  opportunities.  Not  only  will  he  have  had  sufficient 
practice  and  training  to  enter  upon  the  field  of  mining,  but  he 
can  also  engage  in  work  in  which  geology  and  metallurgy  play 
an  important  part,  as  well  as  in  engineering  projects  related 
thereto. 

The  principal  objects  in  view  are  that  the  student,  upon 
graduation,  may  be  enabled:  first,  to  make  and  plat  surface  and 
mine  surveys,  and  to  map  the  topography  and  geology  of  a 
district;  second,  to  analyze,  value  and  treat  minerals  found  upon 
a  property,  to  report  upon  them,  and  to  analyze  metallurgical 
products;  third,  to  make  drawings  and  designs  to  meet  the  re- 
quirements of  given  cases;  fourth,  to  take  a  subordinate  posi- 
tion as  an  engineer  in  connection  with  any  of  the  previously  indi- 
cated lines  of  work. 


BUSINESS  TRAINING  IN  MINING  561 

In  order  that  the  young  engineer  may  advance  in  his  profes- 
sion and  in  the  course  of  years  fill  more  than  a  subordinate 
position  as  a  surveyor,  draftsman,  designer,  chemist,  or  assayer, 
he  must  acquaint  himself  with  many  aspects  of  the  business  of 
mining;  he  must  know  something  of  the  general  methods  and 
practice  in  the  business  world  and,  as  well,  the  more  or  less 
localized  procedure  of  the  mining  district  or  districts  in  which 
he  is  engaged.  The  American  mining  engineer  has  been  called 
upon  to  undertake  varied  problems,  the  success  of  many  of 
which  has  depended  more  upon  a  combined  knowledge  of 
mining  technology  and  business  than  upon  mining  technology 
alone. 

The  other  divisions  of  engineering  are  recognizing  the  de- 
mand for  breadth  of  training,  and  it  seems  unnecessary  to 
present  at  length  reasons  for  including  courses  in  economics 
and  business  in  the  mining  and  metallurgical  curricula.  If  the 
reputation  of  an  educational  institution  is  that  it  develops 
simply  good  assayers,  chemists,  draftsmen,  and  surveyors,  and 
those  who  are  responsible  for  the  course  of  study  in  the  insti- 
tution are  satisfied  with  such  a  finished  product — with  gradu- 
ates who  are  looking  no  higher  than  the  subordinate  positions 
in  large  organizations — then  let  us  continue  by  the  well-devel- 
oped and  accepted  curricula  to  produce  men  of  such  calibre  and 
men  with  such  a  vision  of  their  place  and  opportunity  in  the 
profession.  Honorable  as  such  branches  of  technology  are  as 
a  life  work,  there  are  much  more  important  and  at  the  same 
time  more  lucrative  positions  available  for  the  men  who,  in 
addition  to  having  the  training  along  the  previously  mentioned 
technical  lines,  have  acquainted  themselves  with  the  funda- 
mental principles  of  economics  and  business.  Granting  that 
many  of  the  men  may  not  have  inherent  qualities  fitting  them 
for  leadership  of  the  highest  type,  it  must  still  be  conceded  that 
in  the  course  of  time  every  college-trained  man  should  take 
some  part  in  solving  the  complex  problems  arising  in  the  em- 
ployment of  labor,  the  development  of  mining  communities,  the 
financing  of  private  and  public  enterprises,  etc. 

Value  of  Business  Training 

Upon  graduation  from  mining  curricula  some  men  find  em- 
ployment with  large  corporations  and  may  be  assigned  to  work 


562         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

in  some  special  line ;  others  go  to  the  small  mines,  where  their 
work  is  varied;  they  may  be  assayer,  bookkeeper,  surveyor, 
time  clerk,  and  supply  clerk,  all  in  one  person.  In  such  an  humble 
position  a  general  knowledge  of  business  procedure  is  invalu- 
able. But  wherever  the  young  man  may  go,  if  he  has  had  some 
training  in  economics  and  business,  he  has  a  great  advantage. 
The  chief  questions  are:  How,  when,  and  where  can  he  get 
such  training  without  serious  interference  with  his  technical 
education  ? 

Engineering  Curricula  and  the  S.  P.  E.  E. 

For  several  years  the  Society  for  the  Promotion  of  Engineer- 
ing Education  has  been  studying  engineering  curricula.  The 
Committee  on  Economics  has  secured  and  published  data  on 
economics  courses  included  in  civil,  electrical,  and  mechanical 
engineering  curricula  in  forty-two  institutions  (Proceedings 
S.  P.  E.  E.,  1918,  Vol.  XXVI,  p.  219).  Of  twenty-three  insti- 
tutions requiring  economics,  the  maximum  number  of  credit 
hours  was  twelve,  which  was  required  by  only  one  institution ; 
a  minimum  of  two  was  required  by  six  institutions ;  while  eight 
institutions  of  the  total  of  twenty-three  required  three  hours. 

The  Committee  serving  in  the  year  1917  recommended  to 
their  successors  of  the  Committee  of  1918  that  they  prepare  a 
definite  scope  and  content  of  courses  based  on  the  following 
topics : 

1.  A  preliminary  study  in  commercial  geography  and  indus- 
trial history. 

2.  Fundamental  course  in  the  principles  of  economics. 

3.  Application  of  these  principles  to  engineering. 

4.  Lessons  upon  special  application  in  detail  engineering- 
work. 

The  Committee  appointed  in  1918  undertook  to  follow  the 
suggestions  of  the  Committee  of  1917.  The  Committee  distin- 
guished between  "economics"  and  "economy  of  construction" 
as  follows : 

The  term  economics  is  taken  to  mean  "the  science  of  wealth'* 
and  to  deal  with  matters  pertaining  to  the  consumption,  produc- 
tion, exchange  and  distribution  of  the  world's  wealth  as  a  more 
or  less  abstract  social  science.  (Proceedings,  S.  P.  E.  E.  1918, 
Vol.  XXVI.,  p.  220.)  Economy  of  construction,  on  the  other 


BUSINESS  TRAINING  IN  MINING  563 

hand,  should  cover  those  principles  of  design  and  construction 
which  accomplish  desired  results  with  the  minimum  expenditure 
of  money,  all  factors  being  considered,  and  is  founded  pri- 
marily upon  unit  costs,  maintenance  and  life  of  structures,  and 
cost  of  operation. 

The  Committee  of  1918  recommended  that  "an  outline  course 
on  economics,  but  no  more,  be  required  of  all  engineering  stu- 
dents. Engineering  has  chiefly  an  economic  aspect — that  is,  it 
has  to  do  with  the  production,  exchange,  and  distribution  of 
wealth,  and  the  student  should  become  familiar  with  those 
general  factors  which  are  the  framework  of  society's  economic 
organization  and  should  be  led  to  see  how  engineering  opera- 
tions are  related  to  them.  He  should  understand  that  an  engi- 
neer possesses  a  training  that  has  economic  value  and  that  he 
will  be  able  to  'market  his  wares'  only  as  he  comprehends  the 
economic  and  commercial  organization  of  society  from  both  the 
theoretical  and  practical  viewpoints." 

The  Committee  recommended  that  the  amount  of  time  de- 
voted to  the  formal  study  of  economics  be  not  more  than  three 
semester  credit  hours  and  that  the  subject  matter  be  similar  to 
the  treatment  in  any  standard  text  on  "economics"  with  fre- 
quent illustrations  from  actual  facts  of  commercial  geography 
and  industrial  history.  Recommendation  was  made  that 
"special  subjects  in  the  economics  group,  such  as  accounting, 
labor  problems,  public  and  corporation  finance,  taxation,  money 
and  banking,  and  others,  while  possessing  much  value  as  in- 
formation courses,  do  not  seem  to  deserve  a  place  in  the  engi- 
neering curriculum  owing  to  the  already  crowded  condition  of 
the  latter  and  also  because  an  intelligent  technical  graduate 
can  read  books  on  any  of  these  subjects  understandingly  with- 
out the  aid  of  an  instructor."  (Idem,  p.  222.) 

The  Committee  directed  special  attention  to  the  mode  of 
administering  the  course  in  economics  for  engineering  stu- 
dents, owing  to  the  apathy  of  the  latter  toward  this  subject, 
and  recommended  that  the  subject  of  economics  be  taught  by 
a  professor  of  economics  having  a  broad  education  and  experi- 
ence in  corporation  business — a  man  to  whom  the  subject  is 
alive  and  possesses  a  vital  connection  with  the  commercial 
world. 


564         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Total  Hours  Required  Per  Week 

Professor  Breckenridge,  of  Yale  University,  recently  secured 
the  opinion  of  teachers  in  departments  of  mechanical  engineer- 
ing as  to  the  total  time  to  be  spent  in  class,  drawing,  labora- 
tory, and  study.  Of  eighteen  replies  the  minimum  number  sug- 
gested was  forty-six  and  the  maximum  fifty-four.  The  average 
was  fifty  and  five-tenths  hours.  (Bulletin,  S.  P.  E.  E.,  1919, 
Vol.  IX,  p.  415.) 

Most  of  the  curricula  in  mining  and  metallurgy  now  offered 
require  not  less  than  the  average  number  of  hours  reported  by 
Professor  Breckenridge.  On  the  basis  of  the  "Study  of  Engi- 
neering Education,"  made  by  Dr.  Mann,  a  committee  for  the 
Society  for  the  Promotion  of  Engineering  Education  recom- 
mended : 

That  the  schedules  for  engineering  students  should  call  for  not 
more  than  48  work  hours  per  week  (including  recitation,  lab- 
oratory, field  work  and  home  preparation),  this  time  to  be 
divided  among  not  more  than  five  subjects  which  require  prepara- 
tion outside  of  class  exercise. 

That  all  engineering  students  should  be  required  to  pursue 
courses  which  will  prepare  them  for  administrative  duties  and 
for  responsible  and  effective  citizenship. 


The  Report  of  Dr.  Mann 

Dr.  Mann  in  his  report  refers  to  the  widespread  agreement 
among  professional  engineers : 

That  considerable  attention  should  be  paid  to  humanistic 
studies  like  English,  economics,  sociology,  and  history,  not  merely 
because  of  their  practical  value  to  the  engineer,  but  also  because 
of  their  broad  human  values ;  and  that  the  young  engineer  should 
have  some  conception  of  business  management  and  of  the  most 
intelligent  methods  of  organizing  and  controlling  men. 

The  difficulty  in  present  school  practice  evidently  lies  in  the 
exclusion  from  the  technical  work  of  all  consideration  of  the 
questions  of  human  values  and  costs;  and,  conversely,  the  isola- 
tion of  the  humanistic  studies  from  all  technical  interest.  *  *  * 
And  after  all,  the  ultimate  control  of  all  engineering  projects, 
as  of  all  activities,  is  vested  in  some  man's  decision  that  the 
game  is  really  worth  while ;  and  this  control  is  likely  to  be  more 
salutary,  the  more  completely  the  man  who  decides  comprehends 
the  full  import  of  the  values  and  costs  involved. 


BUSINESS  TRAINING  IN  MINING  565 

The  report  of  Dr.  Mann,  published  in  1918,  has  caused  many 
engineering  educators  to  think  seriously  about  the  real  function 
of  the  institution  with  which  they  are  associated,  and  many 
beneficial  results  of  Dr.  Mann's  work  are  evident. 


Curricula  in  Commercial  Engineering 

The  Bureau  of  Education  has  called  several  conferences  to 
consider  the  development  of  courses  in  "Commercial  Engineer- 
ing." Reports  of  the  suggestions  made  at  these  conferences 
have  been  published,  the  most  important  of  which  are  as 
follows : 

1.  That  from  12  to  18  semester  hours  be  required  of  all  en- 
gineering  students   covering  the   following  subjects:      General 
economics,  cost  accounting,  business  organization,  and  business 
law. 

2.  That  for  engineering  schools   desiring  to   extend  further 
the  commercial  or  industrial  aspects  of  engineering,  the  follow- 
ing subjects  are  recommended  as  electives:  Labor  and  employ- 
ment, corporation  management  and  finance,  statistics,  market- 
ing, scientific  management,  psychology,  transportation,  and  polit- 
ical science. 

3.  That  the  economic  phases  of  engineering  be  emphasized 
in  engineering  institutions  wherever  possible. 

A  brief  review  of  the  status  of  curricula  in  Commercial 
Engineering  and  Business  Administration  is  given  in  the 
Bulletin  of  the  Society  for  the  Promotion  of  Engineering  Edu- 
cation of  June,  1919.  There  have  been  two  new  types  of  cur- 
ricula recognized — namely:  (1)  Commercial  Engineering  or 
Engineering  Administration,  which  is  planned  to  be  a  course 
of  study  leading  to  an  engineering  degree  and  which  included 
enough  technical  subjects  to  classify  it  as  properly  an  engi- 
neering curriculum;  and  (2)  Business  Administration,  which 
is  planned  to  be  a  course  of  study  leading  to  a  degree  in  busi- 
ness or  commerce,  and  which  is  meant  to  be  a  business  admin- 
istration curriculum,  although  it  contains  a  number  of  elemen- 
tary engineering  courses  as  well  as  courses  in  mathematics, 
physics,  and  applied  science.  Both  types  of  curricula  are 
planned  to  train  men  for  administrative  work,  the  former  con- 
taining the  more  engineering. 


566         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  may  be  well  to  keep  these  developments  in  business  and 
engineering  administration  curricula  in  mind  in  considering 
the  possibilities  of  mine  administration  curricula. 

In  commenting  on  this  movement  toward  the  development  of 
Commercial  Engineering,  the  Committee  on  Economics  of  the 
Society  for  the  Promotion  of  Engineering  Education  called 
attention  to  the  "desirability  of  recognizing  the  abnormal  state 
of  industrial  affairs  in  connection  with  the  teaching  of  eco- 
nomics" and  urged  "the  importance  of  laying  emphasis  on 
sound  economic  doctrine.  The  teaching  of  sound  economic 
doctrine  in  colleges  will  be  one  means  of  hastening  the  inevi- 
table return  of  the  economic  pendulum  to  the  mean  position 
which  is  so  necessary  for  further  industrial  development." 


Types  of  Mining  Curricula 

Any  investigation  of  the  feasibility  of  including  training  in 
economics  and  business  subjects  in  mining  and  metallurgical 
curricula  must  recognize  the  fact  that  there  are  several  types 
of  institutions  offering  curricula  leading  to  degrees  in  mining 
engineering.  Obviously  it  will  be  impractical  to  propose  any 
group  of  subjects  which  can  be  adopted  uniformly  in  all  insti- 
tutions, and  all  that  can  be  hoped  for  is  the  presentation  of 
general  suggestions  which  may  be  adapted  to  a  number  of  the 
undergraduate  curricula. 

In  considering  the  problems  arising  in  connection  with  the 
curricula,  control  of  courses,  teaching  staff  available,  etc.,  the 
institutions  offering  instruction  in  mining  and  metallurgy  may 
be  grouped  somewhat  as  follows : 

1.  Schools  or  colleges  existing  as  independent  institutions  and 
primarily  for  instruction  in  mining  and  metallurgy  and  which 
offer  three  or  four  years'  work  leading  to  an  undergraduate 
degree.    Institutions  of  this  type  have  previously  limited  instruc- 
tion to  engineering  and  science  and  the  faculties  have  generally 
not  included  men  properly  qualified  to  offer  courses  in  economics 
(as  defined  by  the  Committee  on  Economics  of  the  Society  for 
the  Promotion  of  Engineering  Education),  accounting,  and  busi- 
ness organization. 

2.  Colleges  or  departments  in  institutions  such  as  colleges  of 
agriculture  and  mechanic  arts.     Usually  the  faculty  of  such  an 
institution  includes  men  qualified  to  give  the  business  courses, 
but  in  many  instances  the  staff  is  not  large  enough  to  give  the 


BUSINESS  TRAINING  IN  MINING  567 

mining  students  the  special  attention  required,  so  that  if  the 
mining  students  are  enrolled  in  the  courses  offered  they  are  not 
likely  to  be  benefited  greatly  by  the  work. 

3.  Colleges  or  departments  in  institutions  in  which  a  college 
of  commerce  is  organized.     Usually  the  teaching  staff  of  a  col- 
lege of  commerce  is  large  enough  so  that  mining  students  may 
be  segregated  from  the  general  classes  taking  commerce  sub- 
jects and  given  the  particular  training  desired. 

4.  Colleges  offering  mining  or  metallurgical  curricula  as  grad- 
uate work   only.     These  may  specify  that  certain   courses   in 
economics  and  business  are  required  for  admission  either  to  the 
entire  curriculum  or  to  certain  advanced  courses;  in  this  way 
the  men  come  into  the  advanced  courses  with  a  broader  view- 
point  and    a    knowledge   of   economics,   business    practice    and 
organization. 

Other  Methods  of  Securing  Business  Training 

The  proposal  that  economics  and  business  subjects  be  re- 
quired as  prerequisites  for  admission  to  mining  and  metallur- 
gical curricula  suggests  that  there  are  several  ways  in  which 
such  courses  or  training  may  be  given  other  than  in  the  under- 
graduate curricula.  Briefly,  they  are  as  follows : 

1.  High   school   or  business   college   courses    in   bookkeeping, 
economics,  and  business  practice  taken  prior  to  entering  col- 
lege.    Certain  fundamentals  may  be  secured  in  this  way,  and 
undoubtedly,  if  there  is  no  opportunity  to  include  courses  in 
economics,  etc.,  in  the  college  or  university  curricula,  the  stu- 
dent should  be  advised  to  elect  substantial  business  courses  in 
the  high  school. 

2.  College  courses  in  economics  and  business  to  be  undertaken 
after  completion  of  a  mining  or  metallurgical  curriculum. 

3.  Training  by  means  of  extension  or  correspondence  courses 
after  graduation  from  a  mining  or  metallurgical  curriculum. 

4.  Independent  reading  and  study  without  supervision. 

Each  of  these  plans  has  some  advantages  and,  at  times,  may 
be  the  only  means  of  feasible  training. 

Present  Status  of  Mining  Curricula 

Information  is  available  regarding  forty  institutions  offering 
curricula  leading  to  degrees  in  mining  or  metallurgy.  Several 
other  institutions  offer  some  work  of  college  grade,  but  not  a 
complete  four-year  curriculum.  Of  the  forty  institutions  re- 
ferred to,  thirty-three  now  have  members  of  the  faculty  teach- 


568        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ing  economics  as  previously  defined,  and  another  expects  to 
appoint  a  Professor  of  Economics  as  soon  as  a  qualified  man 
can  be  secured.  The  six  institutions  not  having  chairs  of  eco- 
nomics are  colleges  of  applied  science  or  mining  and  offer  prac- 
tically no  humanistic  subjects  except  English  and  foreign 
languages. 

Only  thirteen  institutions  include  economics  in  the  mining 
and  metallurgical  curricula  as  a  required  subject,  while  seven 
others  permit  economics  to  be  taken  as  an  elective.  Of  the 
thirty-three  institutions  equipped  to  teach  economics,  there  are 
therefore  only  twenty  institutions  offering  instruction  in  this 
field  to  mining  students.  Of  the  thirty-three  institutions  one 
requires  at  least  two  years'  college  work  before  matriculation, 
and  as  economics  may  be  elected,  the  total  number  of  institu- 
tions in  which  economics  is  either  an  elective  or  required  sub- 
ject is  in  fact  twenty-one. 

Several  other  institutions  are  now  proposing  courses  in  eco- 
nomics for  next  year,  or  advise  that,  upon  approval  of  the 
faculty,  economic  subjects  may  be  substituted  for  certain 
courses  now  required  or  for  technical  electives. 

Economics  and  Business  Courses  Now  Required 

Inasmuch  as  the  total  number  of  institutions  now  requiring 
economics  and  business  subjects  is  only  thirteen,  it  may  be 
profitable  to  make  a  rapid  survey  of  the  subjects,  hours  and 
content  of  the  courses  described. 

Number  1  (a  state  university)  requires  a  three-hour  course 
in  economics  during  the  third  quarter  of  the  senior  year.  In 
addition  there  is  a  three-hour  course  in  mine  management 
given  by  a  member  of  the  mining  faculty,  and  a  two-hour  course 
in  mining  law  by  a  lawyer. 

Number  2  (a  college  of  agriculture  and  mechanic  arts)  re- 
quires a  three-hour  course  in  economics  in  the  first  semester  of 
the  senior  year,  followed  by  a  three-hour  course  in  either  cor- 
porations, money  and  banking,  or  transportation  problems. 
There  are  also  courses  in  mining  law  and  mine  management. 

Number  3  (a  state  university)  requires  a  three-hour  course 
in  economics  the  first  semester  of  the  senior  year,  followed  by 
a  two-hour  course  in  industrial  administration,  the  latter  being 
taught  by  a  member  of  the  engineering  faculty.  The  mining 


BUSINESS  TRAINING  IN  MINING  569 

faculty  gives  a  one-hour  course  in  mine  administration  and  a 
two-hour  course  in  mine  examination  and  reports. 

Number  4  (a  school  of  technology)  requires  a  three-hour 
course  in  economics  throughout  the  junior  year.  The  mining 
courses  present  the  business,  sociological  and  legal  phases  of 
mining. 

Number  5  (a  school  of  mines)  requires  a  three-hour  course 
in  economics  in  both  semesters  of  the  senior  year.  The  pro- 
fessor of  mining  gives  a  one-hour  course  in  mine  management 
during  two  semesters  and  a  one-hour  course  in  mining  law  for 
one  semester. 

Number  6  (a  college  of  agriculture  and  mechanic  arts)  re- 
quires a  three-hour  course  in  economics  during  the  first  semes- 
ter of  the  senior  year,  followed  by  a  three-hour  course  in 
labor  problems.  The  mining  department  gives  a  two-hour 
course  in  mine  administration  and  examination,  a  one-hour 
course  in  economics  of  mining,  and  a  one-hour  course  in  mining 
law. 

Number  7  (a  university)  requires  a  two-hour  course  in  eco- 
nomics, followed  by  a  two-hour  course  in  labor  problems.  Most 
of  the  students  have  also  been  required  to  take  a  two-hour 
course  in  corporation  finance,  a  two-hour  course  in  modern 
industries,  and  a  two-hour  course  in  accounting.  The  mining 
department  has  given  a  five-hour  course  in  one  semester  in  eco- 
nomics applied  to  mining.  If  a  proposed  curriculum  is  ap- 
proved, business  and  economic  subjects  will  be  given  for  five 
hours  throughout  the  junior  year,  and  probably  at  least  one- 
half  of  the  entire  time  of  the  senior  year  will  be  devoted  to 
business  courses. 

Number  8  (a  university)  requires  economics  two  hours  dur- 
ing the  first  semester  of  the  sophomore  year,  followed  in 
sequence  by  accounting  (2  hours),  business  law  (2  hours), 
finance  (2  hours),  industrial  management  (2  hours),  and  con- 
tracts and  specifications  (2  hours) .  All  of  these  subjects  ex- 
cept the  last  are  taught  by  the  economics  department.  The 
mining  department  gives  courses  in  mine  administration, 
valuation,  etc. 

Number  9  (a  state  university)  has  not  required  economics, 
but  a  new  curriculum  now  includes  economics  (three  semester 
hours)  ;  money,  credits,  and  banking  (three  hours)  ;  business 


570         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

law  (three  hours) ,  and  accounting  (two  hours) .  These  sub- 
jects are  to  be  required  for  all  engineering  students.  The 
mining  department  now  gives  a  two-hour  course  in  mine 
management. 

Number  10  (a  school  of  technology)  proposes  to  train  men 
for  the  position  of  mine  superintendents  and  managers.  The 
curriculum  includes  twenty  commercial  and  non-technical 
topics,  including  economics,  contracts,  mining  law,  commercial 
law,  bookkeeping,  cost  accounting,  corporation  finance,  bank- 
ing and  insurance,  compensation  insurance,  labor  problems, 
industrial  management,  transportation,  advertising  and  sales- 
manship, and  applied  psychology. 

Number  11  (a  university)  requires  four  semesters  of  work 
in  economics  and  business  as  follows :  Economics,  first  semes- 
ter, junior  year,  three  hours;  business  finance,  second  semes- 
ter, junior  year,  three  hours;  and  accounting  both  semesters 
of  the  senior  year,  three  hours.  Courses  in  mine  management, 
mine  accounts,  and  mining  law  are  included  in  a  graduate 
curriculum.  The  mining  law  is  taught  by  a  member  of  the  law 
faculty. 

Number  12  (a  state  university)  requires  a  course  in  eco- 
nomics extending  through  both  semesters  of  the  senior  year. 
The  mining  department  gives  a  two-hour  course  in  mine  man- 
agement and  accounts.  All  of  the  other  engineering  students 
take  additional  courses  in  engineering  economics  (one  hour) 
and  engineering  jurisprudence  (two  hours)  taught  by  a  mem- 
ber of  the  engineering  faculty. 

Number  13  (a  school  of  mines)  requires  a  three-hour  course 
in  economics  during  the  second  semester  of  the  junior  year. 
The  mining  department  gives  a  two-hour  course  in  mine  ac- 
counting and  a  one-hour  course  in  mining  law  for  one  semester. 

Mining  Courses  with  Economic  Aspects 

A  number  of  institutions,  in  addition  to  those  cited  above, 
offer  and  require  courses  in  mine  examination  and  valuation, 
mining  law,  and  mine  management.  A  few  give  special  atten- 
tion to  labor  problems  in  the  mining  industry.  One  institution 
includes  mine  examination  and  reports  and  economics  of 
mining  as  required  subjects  in  the  graduate  curriculum. 

It  is  no  reflection  upoi  the  men  giving  these  courses  to  say 


BUSINESS  TRAINING  IN  MINING  571 

that  in  general  these  courses  may  be  classed  as  courses  similar 
to  those  grouped  by  the  Committee  on  Economics  of  the  Society 
for  the  Promotion  of  Engineering  Education  as  "economics  of 
construction"  and  not  truly  courses  in  "economics." 

Several  institutions  now  offer  courses  in  mine  accounts  that 
are  entirely  adequate  for  an  engineer  who  does  not  expect  to 
become  an  accountant;  most  of  the  other  mining  curricula 
would  be  strengthened  by  the  addition  of  a  general  course  in 
accounting. 

Business  Courses  Suggested 

In  the  opinion  of  the  writer,  provision  should  be  made  for 
instruction  in  the  following  subjects,  all  of  which  should  be 
given  three  hours  a  semester  if  possible : 

1.  Principles  of  economics  as  outlined  in  any  standard  text, 
giving  special  attention  to  illustrative  material,  which  should 
be  selected  carefully.    The  method  of  teaching  should  be  a  com- 
bination of  lectures,  recitations,  discussions,  and  assigned  prob- 
lems.    The  course  may  well  come  in  the  first  semester  of  the 
junior  year. 

2.  Business  organization  and  corporation  finance.    This  course 
may  be  given  either  directly  after  the  course  in  economics  or 
may  follow  the  course  in  business  law  and  accounting.    It  should 
include  a  general  survey  of  the  types  of  business  organization, 
the  incorporation  of  companies,  financial  problems  in  connection 
with  corporate  organization,  and  the  organization  of  mines  and 
mining  companies  from  an  operating  standpoint. 

3.  Business   law.      If  other   courses   have   not  presented   the 
fundamentals  of  mining  law,  these  fundamentals  may  be  in- 
cluded in  this  course,  but  the  major  portion  of  the  time  assigned 
to  this  course  should  be  given  to  the  presentation  of  the  funda- 
mental features  of  the  law  of  business.     Among  the  most  im- 
portant subjects  to  be  considered  are  contracts,  real  property, 
agency,  sales,  and  negotiable  instruments.     In  many  engineer- 
ing institutions  courses  are  now  given  in  contracts  and  specifica- 
tions.   The  course  in  business  law  may  properly  precede  a  course 
on   engineering   specifications   and  the   writing   of  engineering 
contracts  as  taught  by  an  engineering  instructor. 

The  course  in  business  law  will  probably  be  considered  by  the 
students  as  a  failure,  unless  the  illustrations  used  have  an  in- 
dustrial background.  While  the  case  method  as  used  in  the  law 
schools  cannot  be  followed  closely  owing  to  the  fact  that  it  has 
been  developed  with  the  idea  of  presenting  legal  procedure  as 
well  as  rules  of  law,  the  use  of  carefully  selected  cases  as 


572         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

illustrations  in  conjunction  with  a  standard  text  on  business  law 
is  highly  desirable.  Experience  has  shown  that  good  results  can 
be  secured  in  teaching  business  law  to  engineering  students,  if 
carefully  selected  cases  are  assigned  occasionally. 

4.  Accounting.  Students  should  be  advised  to  take  bookkeep- 
ing in  high  school.  The  college  course  should  include  an  outline 
of  accounting  and  bookkeeping;  double  entry;  fundamental 
accounts  and  books.  The  fundamentals  of  cost  accounting  should 
be  presented  and  the  preparation  and  analysis  of  financial  state- 
ments of  mining  corporations  included. 

The  foregoing  suggestions  can  be  modified  to  meet  the  local 
problems  of  various  institutions.  Several  institutions  are  now 
giving  courses  of  the  nature  and  extent  suggested,  while  others 
are  giving  more  courses  and  much  more  time  than  the  writer 
suggests. 

Difficulties 

Among  the  difficulties  to  be  encountered  in  introducing  such 
courses  are:  (1)  the  prejudice  of  the  students  and  some  mem- 
bers of  the  faculty  against  courses  in  economics;  (2)  the 
present  crowded  condition  of  the  curricula,  resulting  in  the 
students  neglecting  n'on-technical  subjects  for  technical  courses ; 
(3)  the  fact  that  several  institutions  have  not  previously  em- 
ployed a  teacher  of  economics;  and  (4)  the  scarcity  of  qualified 
teachers  of  economics,  particularly  those  who  have  sufficient 
knowledge  of  industry  and  of  the  engineering  profession  to 
appreciate  the  viewpoint  of  the  engineer. 

In  the  institutions  which  now  provide  instruction  in  eco- 
nomics, but  in  which  the  mining  curricula  do  not  include  eco- 
nomics as  a  required  subject,  the  objection  to  the  addition  of 
economics  is  generally  that  no  time  is  available  or  that  the  eco- 
nomics faculty  will  not  provide  a  proper  course  for  engineers. 
The  latter  objection  may  be  overcome  by  co-operating  with  the 
economics  faculty  and  preparing  a  detailed  outline  of  the 
courses  desired,  based  upon  the  experience  of  the  institutions 
in  which  economics  courses  for  engineers  have  been  established 
successfully. 

The  objection  has  been  raised  that  the  mining  curricula  are 
so  crowded  that  the  addition  of  non-technical  courses  will  result 
in  the  elimination  of  essential  engineering  work.  Two  plans 
may  be  suggested  to  meet  this  objection,  as  follows : 


BUSINESS  TRAINING  IN  MINING  573 

1.  Provide  an  undergraduate  curriculum  to  be  known  as  the 
"mine  administration  curriculum" ;  include  in  it  the  economics 
and  business  courses  desired;  and  for  this  curriculum  give  a 
Bachelor  of  Science  degree,  but  not  in  engineering.   In  a  num- 
ber of  institutions  this  is  not  feasible,  as  the  degrees  conferred 
are  exclusively  in  engineering. 

2.  Add  a  fifth  year,  including  some  graduate  work  in  mining, 
but  largely  courses  in  economics  and  business.    The  demand 
for  a  four-year  instead  of  a  five-year  course  will  probably  pre- 
vent the  successful  development  of  the  latter  plan  in  many 
institutions. 

Institutions  of  the  first  rank  have  been  able  to  provide  as 
much  as  twelve  semester  hours  time  for  economic  subjects.  It 
may  not  be  advisable  to  introduce  more  than  six  hours  when 
the  new  courses  are  inaugurated.  But  before  the  entire  pro- 
posal to  introduce  economics  courses  is  dismissed  on  the  ground 
that  no  time  is  available,  the  following  questions  should  be 
asked  searchingly  by  each  administrative  officer  in  regard  to 
his  own  institution : 

1.  Are  the  students  now  matriculated  properly  qualified  to 
do  collegiate  work? 

2.  Is  the  undergraduate  instruction  given  effectively  ? 

3.  Is  the  student's  time  taken  up  with  routine,  details,  or 
courses  consisting  chiefly  of  informational  matter  which  can 
be  read  independently  after  graduation? 

As  thirteen  institutions  have  endorsed  the  plan  of  giving 
instruction  in  economics  and  business  and  have  found  it  fea- 
sible to  adjust  the  curricula  to  permit  such  courses  to  be  given, 
it  is  no  longer  logical  to  dismiss  the  problem  by  saying  "it  can- 
not be  done"  or  "it  will  not  work."  With  students  properly 
qualified  to  enter  college  and  with  a  competent  faculty  it  has 
worked. 

New  Economic  Problems 

In  conclusion,  it  seems  appropriate  in  urging  the  timeliness 
of  training  in  economics  for  mining  students  to  refer  to  the 
various  broad  economic  problems  being  discussed  in  the  United 
States  and  Europe,  among  which  is  the  nationalization  of 
mines.  Serious  consideration  is  being  given  to  this  matter  in 
Great  Britain,  and  whether  or  not  we  favor  or  oppose  the  plan 


574         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

being  discussed,  it  is  important  that  the  men  who  are  to  be  the 
leaders  in  the  mining  profession  shall  be  able  to  think  clearly 
upon  such  momentous  questions. 

On  August  18,  1919,  the  Prime  Minister  addressed  the 
British  Parliament  regarding  the  report  of  the  Coal  Commis- 
sion as  follows : 

We  have  accepted  the  principle  of  unification  and  reorganiza- 
tion, and  we  think  that  even  the  owners  realize  that  there  is  a 
very  great  case  made  out  for  that,  because  you  have  the 
waste  which  is  due  to  a  large  number  of  different  enter- 
prises running  in  the  same  area  under  different  manage- 
ment— waste  of  power,  waste  in  management,  waste  in  distribu- 
tion. There  is  also  undoubtedly  a  case  to  be  made  out  for  giving 
the  miners  a  greater  interest  and  voice  in  the  working  conditions 
which  affect  them.  Therefore,  we  make  this  recommendation — 
that  in  view  of  the  fact  that  the  living  and  livelihood  of  the 
miners  depend  on  the  way  the  mines  are  worked,  means  should 
be  devised  for  securing  their  co-operation  in  shaping  the  general 
conditions  of  the  industry  without  interfering  with  the  executive 
control  of  individual  mines. 

Now  I  come  to  our  recommendation  with  regard  to  unification. 
It  is  that  the  industry  shall  be  so  organized  as  to  reduce  to  a 
minimum  the  expense  of  management  and  working  charges,  and 
with  this  end  in  view,  the  country  should  be  divided  into  defined 
areas,  in  each  of  which  the  amalgamation  of  neighboring  mines 
should  be  undertaken  within  a  limited  period — say,  two  years; 
and  that  the  workers  in  and  about  the  mines  should  have  direct- 
ors representing  them  in  the  body  controlling  the  area  group  to 
which  they  belong. 

The  Government  proposes  to  prepare  a  scheme  and  submit  it 
to  Parliament  with  the  least  possible  delay,  by  which  the  minerals 
should  be  purchased  by  the  State  and  funds  raised  for  the  pur- 
pose of  promoting  schemes  for  the  social  improvement  and 
amelioration  of  the  conditions  and  amenities  of  life  in  the  mining 
villages.  The  State  should  not  purchase  the  business  of  mines. 

The  plan  proposed  was  not  acceptable  to  trade  unionists  in 
general,  and  by  a  vote  of  4,478,000  to  77,000  a  resolution  was 
carried  which  in  effect  demands  the  nationalization  of  the  coal 
mines.  The  nationalization  of  coal  mines  has  become  one  of 
the  leading  questions  of  the  day  in  England. 

If  nationalization  of  mines  becomes  a  fact  in  England,  it  is 
not  unreasonable  to  expect  there  will  be  a  serious  consideration 
of  the  same  subject  in  America,  and  if  it  becomes  a  critical 


BUSINESS  TRAINING  IN  MINING  575 

question  here,  the  mining  profession  must  be  ready  to  consider 
it  on  broad  lines. 

The  time  appears  to  be  at  hand  when  the  mining  engineer 
must  take  a  more  prominent  part  in  the  affairs  of  the  nation ; 
he  can  do  this  much  more  effectively  if  he  has  a  broad  training 
and  is  qualified  to  consider  the  fundamental  economic  problems 
of  the  mining  industry  and  of  the  nation.  Collegiate  courses  as 
proposed  will  aid  materially  in  furnishing  this  training. 

The  responsibility  of  the  faculty  in  this  matter  cannot  be 
overlooked.  A  recent  publication  of  the  engineering  school  of 
a  leading  university  contains  the  following  statement : 

The  aims  which  have  served  as  controlling  considerations  in 
the  selection  of  the  teaching  staff  and  in  the  laying  out  of  the 
instruction  of  the  school  are:  To  train  men  to  think;  to  lay  a 
broad  and  deep  foundation  with  an  outline  of  the  superstruc- 
ture which  can  be  filled  in  gradually  from  the  training  and  ob- 
servation which  come  from  practical  experience;  to  encourage 
the  student  so  thoroughly  to  understand  each  problem  that  he 
can  apply  the  same  principles  intelligently  to  the  solution  of  en- 
tirely different  kinds  of  problems,  and  finally  to  train  men  to  be 
good  citizens  as  well  as  good  engineers. 

As  the  faculty  is  responsible  for  the  breadth  and  depth  of 
foundation  and  the  outline  of  the  superstructure,  the  subject  of 
training  in  economics  and  business  should  be  considered  with 
the  care  and  the  thought  which  its  importance  warrants. 


576         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


CLOSER  CO-OPERATION  OF  THE  COLLEGES,  UNITED 

STATES  BUREAU  OF  MINES,  AND  INDUSTRIAL 

CORPORATIONS  IN  RESEARCH 

INVESTIGATIONS 

Presented  at  National  Conference  of  Schools  of  Mines  of  The  American 

Mining  Congress  by  E.  A.  HOLBROOK,  Superintendent 

Pittsburgh  Station,  Bureau  of  Mines 

(Published  by  permission  of  Director  of  Bureau  of  Mines) 

A  part  of  the  Organic  Act  of  the  Bureau  of  Mines  charges 
it  with  the  furtherance  of  safety  in  the  mining  industry — mak- 
ing investigations  for  the  prevention  of  waste,  promoting  eco- 
nomic development  and  conservation  of  the  mineral  resources, 
investigating  utilization  of  mineral  fuels,  and  the  dissemina- 
tion of  the  information  obtained.  How  better  can  this  be  car- 
ried out  than  by  close  co-operation  by  the  Bureau  with  the  col- 
leges and  the  industrial  corporations  ?  The  college  is  the  proper 
place  for  the  training  of  men  to  carry  on  the  research  work, 
and  the  Bureau  of  Mines  an  official  agency  for  conducting  gen- 
eral commercial  research,  especially  in  those  fundamental  prob- 
lems the  solution  and  application  of  which  is  to  benefit  the 
whole  mining  industry ;  or  those  problems  the  solution  of  which 
is  of  so  expensive  a  nature  or  of  such  general  application  that 
a  single  corporation  cannot,  as  a  financial  business  concern, 
afford  the  time  and  money  necessary.  Finally,  the  research 
itself  must  concern  and  be  of  benefit  to  the  mining  companies 
and  industrial  corporations  or  to  the  men  employed  by  them. 
It  is  through  the  business  world  that  practical  modification  and 
application  of  ideas  and  processes  which  have  been  developed 
by  the  other  agencies  must  be  put  into  application. 

A  Government  investigative  bureau  may  adopt  one  of  two 
policies  in  its  development.  It  may  pick  out  a  central  location, 
concentrate  its  staff,  buildings,  equipment  and  energies  there 
and  become  the  recognized  center  for  its  special  line  of  work, 
and  to  which  colleges  or  corporations  may  come  for  co-opera- 
tion, assistance  and  advice ;  or,  on  the  other  hand,  it  may  estab- 
lish central  administrative  headquarters  only  and  distribute  its 
personnel  and  equipment  in  separate  stations  throughout  the 


CLOSER  CO-OPERATION  IN  RESEARCH  INVESTIGATION      577 

country.  This  policy  leads  to  an  especially  intimate  contact 
with  local  institutions  and  problems  and  keeps  it  in  close  touch 
with  the  actual  industry.  The  Bureau  of  Mines  is  carrying  out 
the  second  policy. 

First  Field  Co-operation 

The  first  complete  co-operative  field  experiment  station  was 
the  Salt  Lake  station,  where  in  1914  a  co-operative  agreement 
was  entered  into  between  the  University  of  Utah  and  the 
Bureau  of  Mines  by  which  the  Bureau  should  establish  a  field 
experiment  station  at  the  University  and  have  the  use  of  cer- 
tain University  offices  and  laboratories  and  be  given  light,  heat 
and  power,  and  the  assistance  and  co-operation  of  the  teaching 
staff  of  the  University.  On  the  other  hand,  the  Bureau  would 
maintain  a  staff  of  engineers  and  metallurgists  there  whose 
work  should  be  the  solution  of  mining  and  metallurgical  prob- 
lems which  might  prevent  waste  in  the  industries,  increase 
efficiency  and  conserve  human  life.  The  University  further 
agreed  to  establish  fellowships,  the  holders  of  which  should  be 
paid  by  the  University  and  who  should  work  under  the  direc- 
tion of  the  Bureau  engineers  and  on  commercial  problems 
which  were  receiving  the  attention  of  the  Bureau  staff. 

While  preference  has  been  given  local  problems,  yet  problems 
arising  in  distant  districts,  the  solution  of  which  might  aid  in 
the  industry  and  on  which  the  experimental  work  would  be 
valuable  in  the  training  of  the  student  body  and  fellows,  have 
received  equal  attention.  Care  has  been  used  not  to  conflict 
with  the  professional  activities  of  private  consulting  engineers, 
and  the  mere  treatment  of  an  ore  or  mineral  substance  to  deter- 
mine its  adaptability  to  a  known  process  has  been  considered 
secondary  to  the  development  of  new  processes  or  the  adapta- 
tion of  processes  to  conditions  hitherto  not  thought  possible. 
Experiment  stations  of  a  similar  nature  later  were  established 
at  the  University  of  Arizona,  Tucson ;  University  of  Washing- 
ton, Seattle;  University  of  Minnesota,  Minneapolis;  Colorado 
School  of  Mines,  Golden;  and  the  Ohio  State  University  at 
Columbus.  Field  stations  without  college  affiliations  also  have 
been  established  at  Fairbanks,  Alaska,  and  Bartlesville,  Okla., 
where  needs  arose,  but  whose  location  did  not  admit  of  co- 
operation with  colleges.  At  the  University  of  Illinois,  Urbana 


578         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  the  University  of  California,  Berkeley,  co-operative  agree- 
ments have  been  entered  into  and  limited  stations  established. 
They  do  not,  however,  receive  the  full  station  appropriation 
from  the  Bureau  and  their  staff  is  confined  to  such  engineers 
and  metallurgists  as  has  been  possible  to  allot  from  general 
Bureau  funds  from  year  to  year.  The  limited  co-operation  at 
Urbana,  made  first  in  1911,  is  jointly  with  the  Engineering 
Experiment  Station  of  the  University  of  Illinois  and  the  State 
Geological  Survey  and  was  the  first  co-operation  of  the  Bureau 
with  state  and  college  agencies  for  conducting  investigations. 

The  Pittsburgh  Station 

The  main  field  station  of  the  Bureau  at  Pittsburgh,  Pa.,  has 
recently  entered  into  a  new  kind  of  co-operative  agreement 
with  the  Carnegie  Institute  of  Technology.  The  Pittsburgh 
station,  especially  in  coal  mining  laboratories,  gas,  fuel  and 
petroleum  testing,  has  built  up  large  working  sections  of  its 
own  for  the  solution  of  problems  in  these  various  lines  which 
may  arise  anywhere  in  the  country.  At  the  present  time  it  is 
co-operating  with  a  number  of  industrial  corporations  and  com- 
mercial agencies  in  the  solution  of  general  problems,  the  results 
of  which  will  be  accessible  to  the  industry.  For  example,  the 
fuel-testing  section  has  agreements  with  several  industrial 
concerns,  with  the  Shipping  Board  and  with  the  War  Depart- 
ment by  which  tests  are  being  carried  out  under  the  direction 
of  the  Bureau,  the  cost  of  which  is  being  paid  either  wholly  or 
in  part  by  the  other  co-operating  agency.  The  American 
Society  of  Heating  and  Ventilating  Engineers  is  conducting  at 
the  Pittsburgh  station,  under  co-operative  agreement,  a  study 
of  ventilation  and  heat  transmission  problems.  The  petroleum 
section  is  likewise  co-operating  with  that  industry  and  similar 
work  is  being  carried  on  in  the  chemical  and  metallurgical 
sections.  The  Bureau,  moreover,  is  constantly  testing  commer- 
cial explosives  and  apparatus  designed  for  use  in  the  mines, 
with  a  view  to  giving  them  Bureau  approval  for  safety.  This 
work  includes  testing  of  mine  lights,  electrical  and  gasoline 
underground  locomotives  and  electrical  coal  cutting  machinery, 
permissible  explosives,  oxygen  breathing  apparatus,  and  gas 
masks  for  industrial  purposes.  In  this  way  the  Bureau  is  in 
direct  and  constant  contact  with  the  industries  and  their  needs. 


CLOSER  CO-OPERATION  IN  RESEARCH  INVESTIGATION       579 

It  is  desired  that  educational  institutions  and  the  industries 
have  access  to  the  station  and  be  able  to  take  every  advantage 
of  results  being  obtained  there.  For  this  reason  the  Bureau 
has  been  glad  to  enter  into  a  co-operative  agreement  with  the 
Carnegie  Institute  of  Technology  by  which  their  undergraduate 
students  in  mining  may  visit  and  inspect  the  work  being  done 
at  the  Pittsburgh  station,  and  their  graduate  students  and 
fellows  may  be  assigned  work  and  take  part  in  the  tests  and 
researches  being  conducted  by  the  Bureau.  Since  the  problems 
engaged  upon  are  commercial,  mostly  put  up  by  the  industry 
and  of  direct  benefit  to  them,  such  an  agreement  offers  an 
educational  institution  a  chance  to  bring  the  men  they  are 
training  into  intimate  contact  with  the  developments  and  future 
needs  of  the  industry.  It  is  hoped  that  other  institutions  may 
make  similar  co-operative  agreements  with  the  Pittsburgh 
station. 

The  Bureau  further  stands  ready,  as  part  of  its  program  in 
the  dissemination  of  information,  to  set  aside  one  or  more 
weeks  in  each  year  in  which  students  of  mining  or  in  other 
engineering  and  scientific  departments  of  colleges  may  come  to 
the  Pittsburgh  station  and  enter  into  and  have  explained  to 
them  by  special  demonstrations  the  researches  under  way. 

Why  Co-operation  Necessary? 

Why  are  the  colleges,  the  Bureau  of  Mines  and  the  mining 
industry  each  necessary  to  the  other  for  the  proper  develop- 
ment of  mining  and  allied  research  ? 

The  college  wants  to  furnish  graduates  trained  to  be  of  value 
to  the  industry;  the  industry  is  eager  for  ideas,  processes  and 
men  that  are  of  commercial  value.  The  Bureau  must  be  of 
value  to  them  both. 

Both  the  college  and  the  Bureau  have  one  common  object  in 
view — the  furtherance  and  upbuilding  and  application  of 
science  to  the  mining  industry. 

In  the  past  a  tremendous  amount  of  research  work  has  been 
conducted  by  the  colleges  alone  and  a  host  of  problems  solved 
in  this  way.  With  the  development  of  the  research  idea  in 
industrial  corporations  many  problems  are  arising,  the  scope 
of  which  is  so  broad  and  the  expense  and  time  necessary  so 
great  that  the  college  needs  outside  help. 


580         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  college  or  university  is  primarily  an  institution  for  the 
young  man's  development  and  education  and,  secondarily,  one 
for  research.  It  therefore  recognizes  that  having  a  staff  on  the 
campus  who  can  devote  their  whole  time  to  research  means  a 
greater  gain  to  the  research  work  of  the  institution  than  would 
be  indicated  by  the  mere  amount  of  money  allotted  by  the 
Bureau  there.  It  is  often  stated  that  the  modern  engineering 
school  is  in  close  touch  with  the  industries  and  is  no  longer 
isolated  on  purely  abstract  and  theoretical  considerations; 
however,  the  very  nature  of  the  training  which  should  be  de- 
veloped in  the  school  requires  that  the  institution  become  not 
too  practical  and  its  staff  not  too  taken  up  with  commercial 
work  lest  the  college  lose  its  ideals  and  purposes  which  make 
it  a  place  of  training  superior  to  that  of  the  shop  or  field.  On 
the  other  hand,  teaching  is  a  profession  by  itself,  and  even  in 
engineering  a  man  who  must  devote  the  entire  day  to  teaching 
has  only  a  limited  period  each  year  in  which  he  can  hope  to 
come  in  contact  with  other  men  in  his  profession  and  with  the 
corporations  themselves.  Somehow,  the  Bureau  places  students 
and  faculty  in  a  position  in  which  they  feel  more  closely  in 
contact  with  the  industry.  The  Bureau  men,  traveling  about 
in  the  field  for  part  time  and  working  at  the  college  for  part 
time,  are  enabled  to  bring  the  professional  point  of  view  close 
to  the  college. 

Large  parts  of  many  college  laboratories  under  ordinary 
conditions  must  be  idle  for  many  months  in  the  year.  This  is 
not  a  criticism  of  the  laboratory,  but  a  necessary  overhead  ex- 
pense which  the  colleges  recognize  and  which  they  would  gladly 
overcome  were  more  money  or  a  greater  number  of  classes 
available.  A  piece  of  apparatus  perfectly  adapted  for  research 
work  may  serve  a  single  class  for  a  single  day  and  then  lie  idle 
for  half  a  year  or  a  whole  year,  until  new  classes  take  the  same 
work,  unless  opportunity  is  developed  for  research  work.  It  is, 
therefore,  of  tremendous  interest  and  help  to  students  who 
often  see  only  their  instructors  engaged  in  laboratory  and  test 
work  to  be  able  to  see  the  Bureau  of  Mines  men  working  as 
professional  engineers  on  the  same  class  of  problems  with 
which  they  are  expected  to  familiarize  themselves. 


CLOSER  CO-OPERATION  IN  RESEARCH  INVESTIGATION      581 

Reaching  the  Public 

From  the  Bureau  point  of  view  it  has  been  logical  to  seek 
location  at  or  near  a  college  or  educational  institution  where 
college  office  space  and  equipment  are  available,  where  the 
faculty  are  in  touch  with  local  needs  and  situations,  and  where 
the  surroundings  are  congenial  for  research  and  mutual  help. 

Another  point  which  must  not  be  overlooked  is  the  ideal 
chance  offered  in  this  way  for  the  Bureau  to  get  its  ideas  and 
results  of  its  research  across  to  the  engineering  public. 
Although  it  is  a  Government  institution,  it  is  without  police  or 
mandatory  powers  and  its  effectiveness  depends  on  getting  its 
work  across,  on  the  one  hand,  to  the  practicing  industry  and, 
on  the  other,  to  the  men  who  will  control  and  direct  industry 
within  the  next  few  years.  In  engineering,  as  in  medicine,  it 
is  the  undergraduate  who  receives  the  advanced  ideas  and 
processes,  and,  although  later  practical  experience  may  make 
him  more  conservative  as  to  introduction  and  application  of  new 
ideas,  yet  his  very  association  in  college  with  advanced  prin- 
ciples and  processes  gives  him  that  flexibility  of  mind  necessary 
to  apply  new  ideas,  which  never  leaves  him.  His  association 
with  the  station  as  an  undergraduate  or  graduate  student  gives 
him  the  "Bureau  point  of  view."  This  co-operation  between 
the  Bureau  and  the  college  for  the  carrying  out  of  research 
work  is  an  ideal  one ;  working  together  they  can  present  to  the 
industry  with  double  strength  things  which  they  believe  are  for 
its  betterment. 

Every  corporation  has  its  own  research  problems.  A  re- 
search laboratory  of  a  corporation  is  engaged  primarily  in  the 
problems  whose  solution  is  of  direct  benefit  to  the  corporation, 
and  the  only  point  of  view  is  the  application  of  the  problem  to 
the  commercial  success  of  the  corporation.  While  the  large 
corporations  a  few  years  ago  felt  able  to  handle  their  own  re- 
search problems,  the  writer  ventures  that  today  there  is  not  one 
of  the  corporation  research  departments  but  that  will  admit 
there  are  basic  and  far-reaching  problems  which  should  be 
solved  for  the  benefit  of  the  whole  industry  and  whose  solution 
would  be  of  direct  benefit  to  them  in  their  work.  They  further 
admit  that  they  cannot  possibly  consider  taking  the  corporation 
money  and  time  to  work  on  these  problems,  the  solution  of 
which  might  be  of  as  much  or  more  benefit  to  their  competitors 


582         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

as  to  themselves.  Further,  the  results  of  corporation  research 
generally  are  not  available  to  the  public. 

The  small  corporation  in  every  case  must  look  to  outside  help 
on  its  problems.  True  industrial  research  is  a  slow  and  costly 
problem — not  at  all  adapted  to  a  small  commercialized  depart- 
ment, which  must  show  decided  progress  each  day. 

The  industries  often  fear  that  solution  of  their  problems  by 
the  colleges  may  involve  such  a  departure  from  the  dollars  and 
cents  consideration  that  they  will  not  benefit  by  them  and  that 
on  account  of  the  demands  of  the  college  teachers  for  regular 
work  the  time  taken  may  be  too  great  a  factor.  That  they  have 
been  willing  to  co-operate  with  the  Bureau  of  Mines  or  with  the 
Bureau  and  college  jointly  has  been  proven  in  many  cases 
during  the  past  few  years. 

Bureau  Needs  Colleges  and  Public 

Finally,  the  Bureau,  on  its  part,  needs  both  the  other  agen- 
cies. It  must  have  the  college  to  foster  and  keep  alive  for  it  the 
ideals  of  research  and  to  furnish  the  very  material  help  in  men, 
materials  or  ideas,  and  because  it  opens  to  the  Bureau  the  most 
fertile  field  for  the  distribution  of  results  and  ideas  from 
research.  On  the  other  hand,  the  Bureau  must  be  of  direct 
service  to  and  at  the  call  of  the  industry,  and  the  industry  must 
be  satisfied  that  the  Bureau's  help  is  worth  receiving  and  its 
ideas  practical  and  worth  adopting,  else  it  cannot  continue  to 
exist.  Therefore,  the  Bureau  stands  ready  at  all  times  to  co- 
operate with  the  industry  and  with  the  college  in  the  solution  of 
problems  of  benefit  to  the  industry. 


RACIAL  CHARACTERISTICS  AND  THEIR  EFFECT          583 


RACIAL    CHARACTERISTICS   AND   THEIR   EFFECT   IN 

INDUSTRY 

By  THOMAS  T.  READ,  Engineer  in  Charge  Division  of  Education  and 

Information,  U.  S.  Bureau  of  Mines.    Presented  at  National 

Conference  of  Schools  of  Mines  of  The  American 

Mining  Congress 

A  short  time  ago  your  chairman  wrote  me  that  the  subject 
of  the  national  temperamental  characteristics  of  labor,  making 
certain  nationalities  suitable  or  unsuitable  for  mixed  labor  in 
mining  and  metallurgical  work,  was  to  be  considered  at  this 
session  and  asked  me  to  contribute  to  the  discussion.  He 
coupled  this  with  the  statement  that  he  found  it  difficult  to  find 
anyone  who  was  informed  on  this  subject,  and  my  first  impulse 
was  to  respond  that  he  had  not  yet  succeeded  in  that  task,  for  I 
certainly  do  not  feel  that  I  am  possessed  of  sufficient  data  to 
attempt  its  discussion  upon  that  basis  of  ascertained  fact  which 
is  the  standard  method  of  the  engineer.  My  curiosity  was 
aroused,  however,  to  ascertain  whether  there  exists  any  body 
of  organized  knowledge  on  this  subject,  and  I  furthermore  re- 
flected that  the  time  was  too  short  to  permit  the  "passing  of  the 
buck"  to  some  one  else.  I  have,  therefore,  made  a  hasty  survey 
over  the  field  of  such  published  information  as  is  available  to 
me,  and  all  that  I  can  now  present  partakes  rather  of  the  nature 
of  suggestions  than  a  discussion  of  data. 

We  are  all  well  aware  that  races  have  their  mental  charac- 
teristics, and  it  is  a  common  saying  that  the  Latin  races  are 
excitable,  with  all  that  the  word  connotes ;  Scandinavians  are 
somewhat  phlegmatic,  but  likely  to  have  moods  of  depression 
and  exaltation;  and  so  on  through  the  various  peoples  who 
make  up  our  industrial  population.  There  is  a  great  deal  of 
material  on  this  general  topic  scattered  through  literature,  but 
I  cannot  find  that  anyone  has  brought  it  together  from  the  in- 
dustrial standpoint.  The  nearest  approach  seems  to  be  an 
article  on  "Race  Psychology,"  by  Professor  Thomas,  of  the 
University  of  Chicago,  which  appears  in  the  American  Journal 
of  Sociology  for  May,  1912.  This,  however,  is  not  a  presenta- 
tion of  results  of  investigation,  but  is  rather  an  outline  of  the 


584         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

factors  involved  and  includes  a  suggested  form  of  questionnaire 
that  may  be  used  in  gathering  data  on  this  subject.  A  hurried 
scanning  of  the  subsequent  volumes  of  the  American  Journal  of 
Sociology  has  not  disclosed  any  results  from  this  investiga- 
tion, and  I  conclude  that  it  is  still  in  progress.  Another 
source-book  is  Professor  Ripley's  interesting  volume,  "The 
Races  of  Europe."  His  chapter  on  acclimatization  is  especially 
suggestive,  but  deals  almost  wholly  With  physical  factors  and 
barely  touches  on  mental  characteristics.  Professor  Collins' 
"Races  and  Immigrants  in  America"  and  a  number  of  other 
volumes  dealing  with  racial  problems  offer  hope  of  help,  but  on 
investigation  prove  disappointing  to  an  investigator  with  the 
industrial  viewpoint. 

Massachusetts  Data  Interesting 

The  reports  of  the  Statistics  of  Labor  of  the  Commonwealth 
of  Massachusetts  present  a  great  deal  of  interesting  data  that 
might  be  made  the  basis  of  useful  investigation.  These  tables 
show,  for  example,  that,  taking  100  per  cent,  of  the  men  of  a 
given  descent  as  the  basis,  twice  as  many  of  those  of  Irish 
descent  are  engaged  in  government  as  compared  with  those  of 
English  descent,  while  as  compared  with  those  of  German 
descent  the  proportion  is  three  to  one.  On  the  other  hand,  the 
proportion  of  the  Irish  engaged  in  manufactures  is  only  two- 
thirds  as  large  as  that  of  the  English,  who  are  approximately 
equal  to  the  German.  Only  half  as  large  a  proportion  of  the 
Irish  have  children  at  work  as  have  the  English  and  German. 
Statistics  such  as  these  must  be  accepted  with  caution,  because 
those  just  given  might  be  taken  to  indicate  that  people  of  Irish 
descent  are  especially  well  fitted  to  exercise  the  functions  of 
government,  whereas,  as  a  matter  of  fact,  that  is  at  least  open 
to  question,  and  the  reason  for  their  preponderance  in  the  occu- 
pation of  governing  other  people  may  perhaps  be  traceable  to 
other  causes  than  natural  aptitude.  The  statistics  are  of  very 
considerable  value,  however,  because  they  check  out  in  many 
respects.  Thus,  for  example,  comparing  the  men  engaged  in 
manufacturing  occupations,  it  appears  that  the  proportion  of 
Irish  to  those  of  all  other  foreign  descent  is  almost  two  to  one 
in  the  case  of  carpeting ;  one-half  to  one  in  the  making  of  fur- 
niture. This  seems  reasonable,  because  we  know  that  the  Irish 


RACIAL  CHARACTERISTICS  AND  THEIR  EFFECT          585 

people  have  had  much  experience  in  textile  trades  and  rela- 
tively little  in  woodwork. 

These  statistics  have  not  advanced  us  very  far  on  our  road, 
however,  because  there  is  nothing  in  them  to  indicate  whether 
the  differences  found  are  due  to  mental  characteristics  or 
merely  to  previous  experience.  It  would  probably  be  difficult 
to  say  whether  the  tendency  in  the  clothing  trade  for  the  busi- 
ness to  be  largely  in  the  hands  of  Hebrews  is  due  to  natural 
aptitude  of  the  Hebrew  for  this  business,  or  whether  it  is  due 
to  other  conditions,  such  as  early  experience,  or  the  possibility 
that  development  in  that  field  is  easier  for  a  man  of  his  race 
than  it  is  in  certain  other  lines.  Suppose  that  statistics  show 
that  out  of  the  total  number  of  negroes  attempting  to  earn  a 
living  through  the  legal  profession  a  very  small  percentage 
were  successful.  It  might  be  argued  that  these  figures  indicate 
that  the  negro  has  but  very  little  aptitude  for  the  law,  but,  on 
the  other  hand,  it  might  be  held  that  negroes  on  the  average  are 
not  engaged  in  large  businesses  which  furnish  profitable  em- 
ployment for  lawyers ;  that  if  they  were  they  would  probably 
give  their  business  to  a  white  lawyer,  and  that  few  white  people 
would  employ  a  negro  lawyer.  It  is  not  safe,  therefore,  to  gen- 
eralize from  statistics,  for  we  are  well  aware  that  statistics  can 
be  made  to  prove  almost  anything  that  the  author  wishes  to 
prove,  and  their  use  must  be  attended  with  corresponding 
caution. 

Need  of  Exact  Data 

Nevertheless,  in  the  face  of  this  apparent  lack  of  accurate 
data,  there  seems  to  be  definite  need  for  exact  information  on 
the  subject  of  whether  racial  characteristics  are  of  any  large 
importance  in  industrial  life.  There  would  appear  to  be  two 
ways  of  securing  the  necessary  information.  The  one  would  be 
to  awaken  the  sociologists,  psychologists  and  psychiatrists  to 
the  importance  of  the  problem  and  wait  for  them  to  supply  the 
data.  The  other  would  be  for  men  connected  with  industry  to 
attempt  to  secure  it,  with  such  help  as  can  be  secured  from  the 
groups  already  named. 

I  must  confess  to  a  belief  that  such  an  investigation  will 
prove  a  rather  hard  one,  because  of  the  difficulty  of  securing 
data  collected  on  the  basis  of  the  needs  of  the  investigator.  The 


586         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Massachusetts  statistics  to  which  I  have  just  referred  group 
under  those  of  Irish  descent  not  only  those  who  were  born  in 
Ireland,  but  those  who  were  born  in  this  country  of  Irish 
parents  or  from  one  Irish  parent  as  well.  Now,  statistics  show 
us  in  the  case  of  so  simple  a  matter  as  the  birth  rate  that  the 
birth  rate  among  people  of  foreign  birth  is  much  higher  than 
that  among  those  of  native  stock,  but,  on  the  other  hand,  the 
birth  rate  among  those  who  are  themselves  children  of  parents 
of  foreign  birth  is  still  lower  than  that  of  the  native  stock. 
Something  of  this  sort  may  obtain  in  many  cases,  and  it  may 
very  well  be  that  an  attempt  to  generalize  on  the  mental  traits 
of  the  Roumanian  would  prove  to  be  complicated  by  the  fact 
that  Roumanians  born  in  this  country  would  have  quite  dif- 
ferent mental  traits  from  those  born  in  Roumania.  The 
transfer  of  an  individual  from  his  own  to  a  foreign  country  is 
a  phenomena  which  Professor  Thomas  designates  as  a  crisis, 
defining  the  crisis  as  any  marked  disturbance  of  habit.  Meet- 
ing a  crisis  such  as  this  usually  results  in  either  greater  fitness 
or  reduced  efficiency.  The  conflict  that  arises  between  old 
habits  and  new  may  produce  peculiar  mental  states  that  might 
easily  be  considered  as  characteristics  of  the  man's  race,  when 
as  a  matter  of  fact  they  are  only  an  index  to  the  conflict 
between  his  old  habit  of  living  and  thinking  and  his  new.  It 
sometimes  happens,  too,  that  a  failure  to  cope  with  new  circum- 
stances leads  to  a  loss  of  good  qualities  that  had  been  developed 
under  the  old.  I  have  often  heard  it  remarked  of  Chinese  stu- 
dents that  they  had  dropped  the  ancient  Chinese  standards  of 
good  manners  and  had  not  yet  acquired  the  foreign  ones.  These 
are  transitional  phenomena  and  not  racial  attributes. 

Men  Seek  Pleasurable  Occupations 

One  other  thought  that  I  wish  to  bring  out  is  that  mining  has 
heretofore  been  dependent  on  a  supply  of  workers  who  are  not 
provided  with  much  mental  technique.  I  think  we  can  all  be 
quite  certain  that  the  supply  of  such  material  is  decreasing  and 
the  few  large  reservoirs  that  still  exist,  such  as  China  and 
India,  are  going  to  be  unavailable  to  us  for  reasons  both 
political  and  economic.  It  would,  therefore,  seem  more  and  more 
desirable  for  men  engaged  in  the  mining  profession  to  devote 
consideration  to  the  question  of  the  mental  factors  in  their 


RACIAL  CHARACTERISTICS  AND  THEIR  EFFECT          587 

labor  problem.  Other  things  being  equal,  men  are  most  likely 
to  engage  in  the  occupations  that  yield  them  the  maximum  of 
pleasurable  activity.  The  tendency  of  people  to  engage  in  the 
most  pleasurable  occupations  will  only  be  counterbalanced  by 
the  necessity  of  paying  more  for  the  less  pleasurable  ones.  It 
is  a  condition,  not  a  theory,  which  confronts  us  in  this  regard, 
for  a  man  who  can  neither  read  nor  write  but  who  is  willing 
and  able  to  carry  coal  across  the  sidewalk  can  now  earn  more 
in  a  day  than  a  college  professor.  Surely  it  is  becoming  neces- 
sary to  bring  about  some  readjustment  whereby  the  occupa- 
tions involving  manual  labor  will  be  much  more  attractive  to 
the  workman.  Since  it  is  to  the  engineer's  interest  to  have  this 
problem  solved,  it  at  once  becomes  his  duty  to  attempt  to  settle 
it  himself.  It  may  be  that  his  efforts  will  be  scorned  by  pro- 
fessors of  sociology  and  psychology,  but  he  can  well  afford  to 
overlook  a  supercilious  attitude  in  this  regard,  provided  he 
gets  any  results  that  are  of  value  to  him. 


588         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


SAFETY,  WELFARE   AND   INDUSTRIAL   RELATIONS 

WORK 

Address  Before  The  American  Mining  Congress  by  C.  W.  SEIBERLING, 
Vice- President  the  Goodyear  Tire  and  Rubber  Company 

I  have  been  asked  to  tell  you  of  the  experience  of  the  Good- 
year Tire  and  Rubber  Company  in  industrial  management  and 
in  social  service  and  recreational  work.  I  want,  first,  to  give 
you  a  little  of  the  early  history  of  the  Goodyear  Tire  and  Rub- 
ber Company,  so  that  you  may  have  an  opportunity  of  drawing 
some  conclusions  as  to  the  causes  of  its  rapid  growth. 

The  Goodyear  Tire  and  Rubber  Company  was  organized  in 
July,  1898,  by  my  brother,  Mr.  F.  A.  Seiberling,  and  myself. 
Therefore,  on  the  first  of  July  this  year  we  became  of  age  and 
were  21  years  old.  The  capital  paid  in  in  July,  1898,  was 
$100,000.  The  number  of  our  employes  for  the  first  year  was 
approximately  100.  The  amount  of  our  business  the  first  year 
was  approximately  $150,000.  This  year  the  amount  of  capital 
paid  in  is  approximately  $85,000,000.  The  number  of  our 
employes  at  Akron  is  approximately  25,000,  and  with  our  sub- 
sidiaries, the  Southwest  Cotton  Company,  of  Phoenix;  the 
Goodyear  Cotton  Mills,  of  Goodyear,  Conn. ;  our  plantations  in 
the  far  East  and  our  Canadian  plant,  we  have  approximately 
47,000.  Our  total  business  for  this  year  is  approximately 
$169,000,000. 

Co-operation  Built  the  Business 

What  are  the  big  factors  causing  this  growth?  One  of  the 
large  factors  can  be  spelled  in  that  one  word  "co-operation"; 
co-operation  of  its  directors,  its  management,  the  heads  of  its 
departments  and  its  employes. 

The  first  nine  years  pf  our  existence  we  traveled  over  a 
rough  and  rocky  road,  and  this  road  was  particularly  rough 
and  rocky  during  the  years  of  1903,  1904  and  1905.  Every 
time  the  front  door  of  our  office  opened  I  could  feel  the  chills 
go  up  and  down  my  back,  thinking  that  some  creditor  was 
coming  in  to  close  us  up,  but  we  weathered  the  storm  by  the 


SAFETY,  WELFARE  AND  INDUSTRIAL  RELATIONS  WORK     589 

loyalty,  efficiency  and  hard  work  of  the  heads  of  our  many 
departments. 

Rewarded  Faithful  Employes 

In  1907  things  began  to  come  our  way,  and  my  brother  and 
I  felt 'that  the  heads  of  those  departments,  who  had  been  so 
loyal  and  efficient,  were  entitled  to  something  more  than  salary. 
We,  therefore,  concluded  to  take  them  into  partnership.  We 
selected  some  75  or  80  of  the  heads  in  the  factory  and  office  and 
gave  them  stock  running  from  $5,000  and  down  to  $500,  ac- 
cording to  their  value  to  the  concern.  These  employes  gave 
notes  for  their  stock,  the  notes  to  be  paid  for  in  dividends. 
That  man  received  $5,000  worth  of  stock  in  1908  could  sell  his 
holdings  today  for  approximately  $200,000. 

Some  eight  years  ago  we  formed  a  Service  Pin  Association. 
Any  employe  in  our  service  5  years  receives  a  5-year  pin; 
when  in  our  service  10  years,  a  10-year  pin ;  15  years,  a  15- 
year  pin;  and  20  years,  a  20-year  pin.  There  are  but  ten 
20-year  employes.  There  are  more  15-year  employes,  still 
more  10  and  a  very  large  number  of  5-year. 

Employes  Association  Pays  Dividends 

Mr.  P.  W.  Litchfield,  our  factory  manager,  some  four  or  five 
years  ago,  gave  the  Service  Pin  Association  $100,000  of  the 
common  stock  of  the  Goodyear  Tire  and  Rubber  Company. 
The  Service  Pin  Association  has  now  assets  in  excess  of 
$800,000.  Every  year  they  pay  dividends  to  their  members; 
a  5-year  member  holding  one  share,  a  10-year  member  holding 
two  shares,  a  15-year  member  holding  three  shares,  and  a  20- 
year  member  holding  four  shares. 

Employes  Study  Rubber  Business 

Some  eight  years  ago  we  formed  what  is  known  as  a  "Flying 
Squadron."  That  squadron  first  consisted  of  50  men.  This 
has  been  increased  until  now  there  are  1,000.  This  Flying 
Squadron  takes  a  regular  course  in  rubber  manufacture  in  our 
factory.  Every  member  goes  to  school  an  hour  each  day  and 
every  member  works  and  becomes  an  expert  on  each  operation 
in  the  manufacture  of  our  rubber  products,  and  at  the  end  of 


590         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

three  years  he  is  given  a  certificate  as  a  master  rubber  worker. 
He  also  receives  five  shares  of  Goodyear  common  stock  at  par, 
to  be  paid  for  in  dividends. 

As  a  result  of  our  giving  stock  to  employes  in  1908,  our 
Service  Pin  Association  and  our  Flying  Squadron,  we  have  now 
over  1,000  employes  who  are  common  stockholders.  « 

Workmen  Finance  Corporation 

This  year  we  are  re-financing  our  company  and  increasing 
the  capital  to  two  hundred  million ;  one  hundred  million  being 
7  per  cent,  preferred  stock  and  one  hundred  million  common. 
We  have  sold  to  17,600  of  our  employes  this  7  per  cent,  pre- 
ferred stock,  amounting  to  approximately  $8,000,000,  giving 
them  practically  two  years  to  pay  for  same,  at  the  rate  of 
$1  per  share  per  week.  They  can  subscribe  from  1  to  20 
shares.  Every  employe  who  stays  in  our  employ,  at  the  end  of 
each  year,  and  up  to  five  years,  if  he  has  his  stock,  gets  a 
3  per  cent,  bonus.  He  is,  therefore,  getting  a  10  per  cent, 
return  on  his  investment.  As  a  result,  we  will  have  practically 
18,000  to  19,000  employes  who  are  stockholders  in  our  com- 
pany. They  are  not  simply  employes,  but  they  are  part  owners, 
and  with  such  conditions  you  can  get  co-operation,  which  you 
never  could  get  otherwise. 

Modern  Homes  for  Workers 

Some  seven  years  ago  we  started  a  housing  proposition  on  a 
high  piece  of  land  known  as  "The  Goodyear  Heights."  We  had 
the  planning  done  by  a  Boston  landscape  architect.  The  lots  run 
from  50  by  120  to  150  feet  deep.  No  two  houses  of  the  same 
design  are  allowed  to  stand  side  by  side.  All  houses  are  fitted 
with  electric  lights,  gas,  water,  sewer  and  all  modern  conveni- 
ences, and  range  in  price  from  $2,500  to  $10,000.  The  em- 
,  ployes  are  given  15  years  to  pay  for  these  homes,  paying 
monthly  20  to  35  per  cent,  more  than  they  would  have  to  pay 
rent.  We  now  have  in  this  allotment  1,800  homes.  I  do  not 
think  there  exists  in  the  United  States  any  finer  workmen's 
homes  than  stand  in  this  allotment.  What  is  the  result  ?  You 
get  an  employe  who  is  happy  and  contented,  who  finds  some- 
thing in  life  to  live  for  besides  working,  eating  and  sleeping. 


SAFETY,  WELFARE  AND  INDUSTRIAL  RELATIONS  WORK  591 

Industrial  Democracy 

Five  months  ago  we  started  the  industrial  management  plan 
in  our  factory.  This  was  a  plan  worked  out  after  much  hard 
thought  by  our  factory  manager,  Mr.  Litchfield.  It  is  based 
on  principles  similar  to  the  form  of  our  United  States  Gov- 
ernment, consisting  of  a  House  of  40  members  and  a  Senate 
of  20  members.  The  factory  is  divided  into  40  Representative 
districts  and  20  Senatorial  districts.  Any  man  can  be  a  voter 
who,  first,  is  an  American  citizen,  who  is  over  18  years  of  age, 
and  who  has  been  in  our  employ  constantly  for  more  than  six 
months.  A  man  can  be  elected  a  Representative  who  is,  first, 
an  American  citizen,  who  is  over  21  years  of  age,  and  who  has 
been  in  our  employ  continuously  for  over  a  year.  A  man  can 
be  elected  a  Senator  who  is  an  American  citizen,  who  is  over 
25  years  of  age,  and  who  has  been  in  our  employ  continuously 
for  over  five  years. 

Exciting  Political  Contest 

The  first  election  was  as  exciting  as  any  you  have  had  in 
your  several  cities.  Two  papers  were  issued,  one  called  "The 
Goodyear  Whistle,"  and  the  other  "The  Goodyear  Echo,"  each 
boosting  its  candidates.  The  60  men  chosen  were  good  men. 
Had  the  management  chosen  the  men  I  do  not  believe  they 
could  have  chosen  better.  No  executive  or  head  of  a  depart- 
ment could  be  a  voter  or  could  be  elected  to  office,  and  we  dis- 
couraged having  even  foremen  elected  to  office.  However, 
about  20  out  of  the  60  elected  were  foremen. 

Real  Test  of  Loyalty 

Six  weeks  after  the  plan  went  into  eifect  the  Machinists' 
Union  in  our  city  declared  a  strike.  We  have  about  750 
machinists  in  our  employ  and  about  25  per  cent,  are  union  men. 
The  Union  made  a  demand  for  44  hours  instead  of  48  and  88 
cents  minimum  wage.  The  fact  was,  they  simply  wanted  to 
get  recognition  of  the  union  and  have  a  closed  shop,  which  is 
something  our  company  would  never  stand  for.  We  were  pay- 
ing machinists  from  88  cents  to  $1.12  per  hour. 

A  committee  of  five  union  men  went  to  the  representative 
of  their  district  and  put  up  the  demands.  He  told  them  that 


592        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

they  did  not  come  representing  Goodyear  machinists,  but  the 
Machinists'  Union.  They  acknowledged  this  to  be  the  fact. 
The  representative  said  he  would  put  the  matter  up  to  the 
House  and  Senate,  if  the  union  would  abide  by  its  decision. 
This  they  agreed  to  do. 

The  House  and  Senate  worked  on  the  matter  five  or  six 
nights  from  7  to  11  o'clock,  but  had  reached  no  decision  on 
the  15th  of  August,  and  the  machinists  were  ordered  to  strike. 
Forty-two  per  cent,  of  our  machinists  left  their  work.  The 
58  per  cent,  kept  on  the  jobs.  After  being  out  some  six  weeks 
our  machinists  wanted  to  return  and  sent  a  committee  to  the 
representative,  asking  if  they  could  return  in  a  body.  He  told 
them  "no" ;  that  they  had  left  the  employ  of  the  company  and 
would  have  to  apply  for  work  as  individuals.  This  they  finally 
did. 

Strikers  Rejected  by  Fellow- Workmen 

The  Senate  appointed  a  committee  of  three  to  examine  each 
man.  He  was  asked  if  he  was  satisfied  with  the  wages,  with 
the  working  conditions  and  with  the  hours,  to  which  he 
answered  "yes."  He  was  asked  if  he  would  strike  tomorrow  if 
the  union  ordered  a  strike.  Some  25  or  30  said  they  would,  and 
they  were  told  to  pass  out  as  there  was  no  work  for  them.  The 
rest  were  told  to  go  back  to  their  jobs.  As  a  result,  this  com- 
mittee refused  work  to  some  35  of  the  men  who  said  they  would 
strike  if  the  union  told  them. 

Employes  Control  Conditions 

The  House  and  Senate  have  passed  some  good  laws.  They 
have  passed  some  laws  which  in  previous  years  we  would  not 
consent  to,  for  the  reason  we  felt  the  workmen  would  abuse 
them,  but  they  have  the  matter  in  their  own  hands  and  they 
are  going  to  see  that  no  one  does  abuse  them.  They  control 
all  matters  of  wages,  hours,  working  conditions  and  grievances. 
When  they  pass  a  law  it  is  sent  to  the  factory  manager.  If  he 
disapproves,  it  is  sent  back  to  the  House  and  Senate,  and  if 
they  pass  it  by  a  two-thirds  vote,  it  becomes  a  law,  unless 
vetoed  by  the  Board  of  Directors.  I  have  felt  that  it  is  going 


SAFETY,  WELFARE  AND  INDUSTRIAL  RELATIONS  WORK     593 

to  prove  a  success — a  fine  thing  for  the  employe  and  a  fine 
thing  for  the  stockholders  of  the  Goodyear  Tire  and  Rubber 
Company. 

Athletics  and  Social  Service 

Now,  as  to  social  service  and  recreational  work.  Some  10 
years  ago  we  started  in  on  athletics.  Since  that  time  we  have 
broadened  the  scope  of  the  work,  and  today  we  have  27  differ- 
ent athletic  and  social  service  organizations,  of  which  there 
are  the  following:  The  Three  Arts  Club,  Friars  Club,  Green 
Room  Club,  Baseball  Regulars,  Baseball  Silents,  Baseball  Inter- 
Department,  Girls'  Baseball,  Football  Regulars,  Football  Silents, 
Basketball  Regulars,  Basketball  Silents,  Girls'  Basketball,  Bas- 
ketball Inter-Department,  Regular  Soccer,  Playgrounds,  Girls' 
Recreation  Division — office  and  factory,  Goodyear  Band,  Good- 
year Orchestra,  Tennis,  Bowling,  Track,  Rifle  Club,  Triangle 
Club,  Boxing,  Wrestling,  Boy  Scouts  Work,  Goodyear  Girls' 
Camp  and  Goodyear  Y.  W.  C.  A. 

Every  one  of  these  activities  appoints  a  member  to  the  Cen- 
tral Committee.  The  Central  Committee  elects  an  Executive 
Committee  of  seven,  who  run  all  the  social  and  recreational 
activities  of  the  Goodyear  Tire  and  Rubber  Company.' 

The  Three  Arts  Club  is  composed  of  about  150  members 
from  the  general  and  factory  offices,  who  put  on  some  of  the 
finest  musical  comedies  you  have  ever  seen,  and  their  singing 
is  splendid.  This  year  they  are  studying  the  opera  "Robin 
Hood,"  which  will  be  put  on  in  February  or  March. 

The  Friars  Club  is  a  minstrel  troupe  composed  of  50  mem- 
bers of  the  factory,  which  puts  on  some  of  the  finest  amateur 
performances  you  have  ever  seen.  I  went  with  them  to  Camp 
Sherman,  Chillicothe,  Ohio,  a  year  ago  last  December,  where 
they  gave  an  entertainment  to  5,000  soldiers.  It  was  one  of 
the  finest  amateur  performances  the  soldiers  had  witnessed. 

A  year  ago  last  January  I  went  with  them  to  Camp  Sheri- 
dan, Montgomery,  Ala.,  where  they  put  on  an  entertainment 
for  the  soldiers.  These  two  trips  were  made  at  an  expense  of 
$4,500  to  the  Goodyear  Company,  but  it  was  money  well  spent. 
It  gave  the  soldiers  a  fine  entertainment  and  the  men  got  much 
out  of  giving  pleasure  and  entertainment  to  others. 


594         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

To  show  you  the  spirit  of  these  Friars,  who,  you  understand, 
are  all  employes  of  the  factory  and  factory  office,  every  four 
or  five  weeks  they  go  to  the  Springfield  Lake  Sanitarium,  five 
miles  from  Akron,  where  there  are  120  tubercular  patients, 
60  to  65  per  cent,  of  whom  go  away  in  boxes.  Here  they 
give  a  fine  entertainment  to  amuse  these  unfortunate  people, 
many  of  whom  can  live  but  a  short  time.  They  also  go  to  the 
County  Infirmary,  where  there  are  about  120  old  men  and 
women  who  are  down  and  out,  and  give  pleasure  and  entertain- 
ment. They  also  go  to  the  Children's  Home,  where  there  are 
120  kiddies  who  have  no  fathers  or  mothers.  They  also  go 
to  the  Children's  Hospital.  Note  the  spirit  of  these  men,  who 
are  not  selfishly  thinking  of  themselves,  but  are  thinking  of 
their  fellow-men  who  are  less  fortunate. 

The  Green  Room  Club  is  composed  of  actors  and  actresses 
who  are  taken  from  our  factory  and  factory  office.  You  have 
no  idea  of  the  amount  of  hidden  talent  there  is  in  these  indus- 
trial institutions. 

Our  regular  baseball  team  is  one  of  the  best  in  the  city. 
Three  out  of  five  years  they  have  won  the  city  championship. 
They  are  fine  fellows,  good  sports  in  winning  and  also  in  losing. 
Last  September  I  took  a  trip  with  them,  going  to  Chicopee 
Falls,  and  Goodyear,  Connecticut.  I  spent  four  days  with  them 
and  had  one  of  the  best  times  of  my  life. 

Deaf -Mutes  Employed 

The  silent  baseball  team  is  composed  of  deaf-mutes,  and, 
incidentally,  I  might  say  we  have  550  deaf-mutes,  the  largest 
colony  of  deaf-mutes  employed  by  any  industry  in  the  world. 
They  are  fine  workmen  and  all  good  sports.  They  also  have 
a  football  team,  which  won  the  championship  of  the  city  a 
year  ago.  I  just  wish  I  had  time  to  tell  you  of  one  of  their 
banquets  which  I  attended.  You  might  think  it  was  a  pretty 
quiet  affair,  but,  by  "gory,"  it  was  pretty  good.  [Laughter.] 
Then,  they  have  a  basketball  team. 

The  mute  girls  have  a  basketball  team  which  is  a  corker. 
They  played  the  Y.  W.  C.  A.  girls'  team  and  they  got  into  a 
fight.  The  Y.  W.  C.  A.  girls  went  to  scratching.  The  mute 
girls  scratched  back  and  they  won  the  fight  and  the  game. 


SAFETY,  WELFARE  AND  INDUSTRIAL  RELATIONS  WORK  595 

[Laughter.]  They  didn't  talk,  they  just  scratched.  Our  girls' 
baseball  team  has  never  been  beaten,  and  it  is  simply  wonder- 
ful to  watch  them  bat  and  field  the  ball  and  play  the  game. 

Our  regular  basketball  team  has  never  been  defeated  in  the 
city  of  Akron  in  the  past  five  years  by  an  industrial  team. 
Our  soccer  ball  team  won  the  city  championship  last  year,  also 
the  State  championship,  but  lost  the  United  States  cham- 
pionship. 

We  have  a  fine  band  and  we  have  a  fine  orchestra.  We  have 
six  fine  tennis  courts.  We  furnish  them  a  fine  baseball  field, 
which  is  as  good  as  any  in  the  land.  We  also  have  a  fine  track 
and  oval  on  which  football  games  and  the  running  and  jumping 
contests  take  place. 

We  have  a  fine  children's  playground,  and  on  any  Saturday 
or  Sunday  you  can  see  from  300  to  500  kiddies  sliding  down  the 
toboggans,  riding  around  the  whirligigs  or  wading  in  pools, 
all  under  the  supervision  of  four  or  five  nurses. 

Building  a  Clubhouse 

We  are  now  completing  a  clubhouse  for  our  employes  which 
will  cost  approximately  two  and  a  quarter  million  dollars.  This 
clubhouse  contains  a  gymnasium  220  by  120  feet.  Next  to 
the  gymnasium  is  a  theatre  which  will  seat  1,800  people,  the 
stage  being  between  the  two  places;  theatre  and  gymnasium 
will  seat  approximately  7,000  people.  Beneath  the  gymnasium 
we  have  12  fine  bowling  alleys,  5  shooting  galleries,  1,000 
lockers  and  50  shower  baths.  The  bowling  alleys  are  going 
from  7.30  in  the  morning  until  11  o'clock  at  night.  In  the  club- 
house we  will  have  a  reading  room,  meeting  room  for  the  House 
and  Senate,  a  restaurant,  etc. 

We  are  furnishing  the  equipment  for  all  these  athletics,  but 
the  men  themselves,  through  the  Central  Committee,  are  run- 
ning them  and  they  are  making  them  break  a  little  better  than 
even. 

Any  day  at  noon  you  can  see  from  300  to  600  factory  em- 
ployes dancing  during  the  noon  hour  in  the  gymnasium,  and 
usually  from  100  to  150  girls  are  dancing  in  the  recreation 
room  in  the  general  office. 

We  have  a  Y.  W.  C.  A.  Club,  numbering  700  women,  which 
is  the  largest  industrial  Y.  W.  C.  A.  Club  in  the  world. 


596         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Educational  Work 

We  have  a  factory  school  in  which  approximately  5,000  of 
our  employes  are  enrolled.  The  school  has  43  teachers  and  is 
in  session  from  7.30  in  the  morning  until  10  at  night,  in  order 
to  take  in  the  three  shifts.  The  school  teaches  Americanism, 
reading,  writing,  grammar,  chemistry,  mathematics,  drawing 
and  factory  practice.  About  50  per  cent,  of  our  employes, 
including  foremen,  flying  squadron,  go  to  school  one  hour  per 
day  on  company  time,  and  the  other  50  per  cent,  go  on  their 
own  time.  Our  factory  manager,  Mr.  Litchfield,  is  responsible 
for  most  of  this  splendid  work. 

What  does  all  this  mean?  It  means  that  we  are  trying  to 
make  the  employes  happy  and  contented,  that  we  are  taking 
a  human  interest  in  the  employe.  You  should  understand  that 
the  employe  does  not  want  charity,  but  he  does  like  to  have 
some  interest  taken  in  him.  If  the  employe  is  happy  and  con- 
tented, he  will  do  more  for  himself  and  he  will  do  more  for 
you.  If  he  is  unhappy  and  discontented,  he  will  do  less  for 
himself  and  he  will  do  less  for  you.  It  does  seem  to  me  that 
the  time  has  come  in  this  world  when  we  should  think  less 
of  self  and  a  little  more  of  our  fellow-men. 

Building  Men 

Every  industrial  institution  ought  to  take  a  human  interest 
in  its  employes  and  help  to  make  them  happy  and  contented. 
If  it  does  not  want  to  do  this  from  a  humane  standpoint,  then 
it  should  be  done  from  a  selfish  standpoint,  for  it  wins  either 
way. 

When  you  stop  to  think  of  it,  what  is  there  worth  living 
for  in  this  world  except  happiness?  And  how  can  any  of  us 
be  happy  unless  we  help  others  to  be  happy  ?  And  by  helping 
your  employe  to  be  happy  and  contented  you  are  not  only 
helping  to  make  him  a  good  employe,  but  you  are  making  him 
a  better  American  citizen.  I  thank  you.  [Applause.] 


A  PROPOSED  FIRST-AID  ORGANIZATION  597 


A  PROPOSED  FIRST-AID  AND  MINE-SAFETY  SOCIETY 
ORGANIZATION 

By  J.  J.  RUTLEDGE,  Mining  Engineer,  U.  S.  Bureau  of  Mines, 

McAlester,  Oklahoma,  and  NOEL  HUBBARD,  Chief  Clerk, 

Bureau  of  Mines,  Golden,  Colo. 

(Published  by  Permission,  Director  Bureau  of  Mines) 

One  of  the  greatest  difficulties  in  carrying  on  first-aid  and 
mine-rescue  work  is  the  continuation  and  carrying  on  of  the 
work  throughout  the  year,  especially  after  the  instructor,  who 
has  given  the  training,  has  left  the  camp.  It  has  been  the 
custom  since  the  inception  of  the  work  to  stimulate  the  interest 
by  annual  first-aid  contests  and,  during  the  later  years,  by 
mine-rescue  contests,  in  addition  to  the  first-aid  contests. 
These  contests  are  very  good  indeed,  arouse  enthusiasm  and 
interest  in  the  work  and  get  the  co-operation  of  operators,  and 
miners  for  the  time  being,  but  the  interest  soon  wanes  and 
during  the  remainder  of  the  year  the  work  is  not  carried  out 
regularly  or  systematically.  What  is  needed  is  something  to 
make  the  work  more  representative  and  one  in  which  all  the 
employees  in  a  mine,  from  the  general  manager  down  to  the 
trapper,  will  be  interested.  The  interest  of  miners  is  only 
aroused  when  they  have  a  voice  and  a  part  in  the  work  in  hand, 
and  any  means  to  increase  the  interest  of  the  miners  and  other 
employees  should  be  encouraged  and  welcomed.  Generally 
speaking,  the  mine  officials  are  usually  much  more  interested  in 
the  first-aid  and  rescue  work  than  the  miners,  but  if  the  work 
is  to  be  a  success  the  miner  must  also  be  interested  and  encour- 
aged to  take  part  in  it,  for  he  is  the  one  for  whom  the  work  is 
intended  and  for  whose  benefit  it  is  carried  on. 

Should  Be  National  Movement 

In  any  work  or  movement  at  the  present  time  success  is  only 
possible  when  the  movement  is  made  representative. 

Our  war  work  has  brought  us  some  great  truths,  one  of 
which  is  the  following : 


598         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

No  work  or  organization,  be  it  commercial,  social,  or  religious 
in  character,  can  succeed,  or  even  exist,  without  the  support  of 
State  or  National  organizations.  Our  Commercial  Clubs,  Rotary 
and  Lions  Clubs,  and  all  our  church  organizations  require  the 
support  of  the  State  and  National  bodies  of  which  they  are  a 
part.  In  like  manner  first-aid  and  mine-rescue  work  requires 
the  support  of  State  and  National  organizations  if  it  is  to  suc- 
ceed or  live. 

The  writers  believe  that  this  humanitarian  work  is  as  much 
entitled  to  a  county,  state  and  national  drive  for  funds  for  its 
support  as  is  the  Red  Cross. 

The  need  for  a  permanent  organization  of  miners  trained  in 
safety,  first-aid  and  rescue  work  has  been  long  felt.  The  many 
thousands  of  miners  trained  by  the  Bureau  of  Mines  and  others 
are,  with  few  exceptions,  unorganized,  and  for  lack  of  oppor- 
tunity to  meet  together,  exchange  ideas  regarding  safety  in 
mining  and  methods  of  administering  first  aid,  or  of  conducting 
rescue  operations,  soon  lose  interest  in  or  get  out  of  touch  with 
such  work,  or,  leaving  the  mines  in  which  employed  and  where 
they  received  training,  it  becomes  difficult  to  communicate  with 
them  in  case  of  emergency.  Moreover,  such  societies  as  have 
been  organized  at  mines  are  without  definite  program  or  object, 
and  do  not  know  what  to  do  when  they  meet,  aside  from  the 
general  practice  work,  which  soon  becomes  monotonous. 

Plan  for  Organization 

This  paper  outlines  a  plan  of  organization  and  of  definite 
work  for  mine  safety  societies,  and  in  such  a  way  that  the  work 
should  be  of  interest  to  the  men,  and  the  organization  be  kept 
alive.  Experience  has  shown  that  it  is  difficult  to  secure  results 
without  an  incentive  to  enthusiasm  and  the  bestowal  of  honors, 
all  of  which  is  lacking  under  the  present  unorganized  system. 
The  only  exception  to  this  is  first-aid  contests,  which  have  little 
effect  upon  the  interest  in  organized  safety  work.  The  only 
first-aid  practice  engaged  in  by  miners  under  present  conditions 
is  that  had  when  training  for  preparation  for  an  annual  first- 
aid  contest.  Such  training,  while  beneficial,  generally  lasts  for 
a  few  weeks  and  is  then  dropped. 

The  system  herein  outlined  will,  it  is  believed,  provide  the 
opportunity  and  incentive  for  enthusiasm,  and  attaining  of 
honors  needed  to  keep  up  interest  in  organized  safety  work. 


A  PROPOSED  FIRST-AID  ORGANIZATION  599 

It  is  believed  that  under  the  plan  herein  outlined  the  men  can 
be  induced  to  meet  regularly  throughout  the  year  for  practice 
and  for  the  study  of  mine-safety,  first-aid  and  rescue  and 
recovery  problems. 

The  spirit  of  rivalry  present  in  first-aid  and  mine-rescue  con- 
tests will,  it  is  believed,  be  manifest  in  this  work  to  a  greater 
extent  than  in  the  unorganized  contests,  on  account  of  the 
larger  field  and  the  opportunity  to  secure  honors.  The  plan  for 
issuing  certificates  provided  herein  will  be  an  added  stimulus 
and  will  in  many  instances  be  of  value  to  the  holders  of  the  cer- 
tificates in  seeking  employment  at  mines  or  in  other  industries. 

It  is  believed  that  the  following  plan  will  prove  to  be  a  solu- 
tion of  the  problem  of  interesting  the  miner  and  mine  employees 
in  this  humanitarian  work : 

SUGGESTED  CONSTITUTION  FOR  A  SAFETY  SOCIETY 

ARTICLE  I— Name 

The  name  of  this  organization  shall  be  "The  Safety   Society  of  the 
Coal  Company." 


ARTICLE  II— Object 

The  object  of  this  organization  is  to  train  the  members  in  the  principles 
of  first-aid  to  the  injured  and  in  the  principles  of  safety  first,  in  order 
that  said  members  may  be  able  to  render  aid  to  fellow-workmen  in  these 
cases — accidents,  sickness,  etc.,  to  endeavor  to  avoid  and  reduce  to  a 
minimum  the  accidents  that  occur  in  the  mining  industry,  to  make  more 
safe  the  life  and  limb  of  the  active  working  miner,  and  to  better  condi- 
tions generally  in  the  miners*  lives. 

ARTICLE  III— Membership 

SECTION  1.  The  membership  of  this  body  shall  consist  of  only  such 
persons  as  hold  a  proper  certificate  issued  by  the  United  States  Bureau 
of  Mines,  or  those  who  have  signified  their  intention  of  taking  the 
Bureau's  course  of  instruction  and  securing  such  a  certificate.  Provided 
that  in  case  any  member  shall  not  take  the  training  and  secure  a  certifi- 
cate, or  become  eligible  for  a  certificate,  within  a  period  of  six  months 
after  becoming  a  member  of  this  Society,  he  shall  forfeit  this  membership 
and  shall  not  be  eligible  to  membership  again  until  he  does  secure  such 
a  certificate,  unless  the  Bureau  of  Mines  shall  rule  otherwise. 

SEC.  2.  Each  member  shall  before  being  admitted  to  the  full  fellow- 
ship of  the  Society  sign  the  following  pledge:  "I  hereby  promise  that  I 
will  faithfully  abide  by  the  properly  constituted  rules  of  this  Society, 
and  that  I  will  endeavor  at  all  times  to  follow  the  safety  rules  laid  down 
by  the  Company;  that  I  will,  whenever  possible,  and  under  any  circum- 


600         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

stances,  render  such  aid  as  I  possibly  can  to  any  person  who  may  be 
injured;  and  that  I  will  suggest  to  the  management,  through  the  Safety 
Committee,  any  safety  rules  that  would  in  my  opinion  make  more  safe 
the  general  working  conditions  around  the  mine;  that  I  will  warn  any 
person  in  or  about  the  mines  that  I  see  is  about  to  do  something  that 
is  dangerous  or  contrary  to  the  rules  of  the  Company,  but  I  will  do  this 
in  the  proper  way  and  spirit;  and  that  I  will  faithfully  attend  the  meet- 
ings of  this  organization  and  endeavor  to  carry  out  the  purposes  for  which 
it  is  organized  in  spirit  and  in  truth." 

ARTICLE  IV— Dues 

There  shall  be  no  initiation  fee.  The  dues  of  the  organization  shall 
be  one  dollar  ($1.00)  per  year,  payable  in  quarterly  installments  in 
advance.  A  member  joining  during  the  first  half  of  any  quarterly  period, 
his  dues  shall  begin  with  the  first  half  of  that  quarter,  and  if  joining 
during  the  last  half  of  the  quarter,  his  dues  shall  begin  with  the  first 
succeeding  quarter. 

ARTICLE  V— Officers 

The  officers  of  this  Society  shall  be  a  president,  a  vice-president,  a  secre- 
tary, and  a  treasurer.  These  shall  be  elected  annually  and  perform  the 
duties  usually  appertaining  to  such  officers. 

ARTICLE  VI— Committees 

SECTION  1.  There  shall  be  maintained  an  Executive  Committee,  con- 
sisting of  the  president,  vice-president,  secretary,  and  treasurer;  a  Mem- 
bership Committee,  Instruction  Committee,  and  a  Social  Committee,  con- 
sisting of  three  members  each,  and  a  Safety  Committee  consisting  of 
one-fourth  of  the  active  members  of  the  Society. 

SEC.  2.  The  duties  of  the  Membership  Committee  shall  be  to  seek  to 
interest  others  in  first-aid  instruction  and  thus  increase  the  membership 
of  the  Society,  and  such  other  duties  as  the  Society  may  instruct  it  to 
carry  out.  The  Instruction  Committee,  of  which  the  vice-president  shall 
be  chairman,  shall  make  arrangements  for  study  courses,  lectures,  etc., 
on  the  first-aid  and  safety  subjects  for  the  benefit  of  the  Society.  The 
Social  Committee  shall  take  care  of  the  social  side  of  the  organization. 
The  Safety  Committee  shall  be  charged  with  the  general  safety  work 
around  the  mine,  so  far  as  the  Society  is  concerned. 

SEC.  3.  The  Executive,  Membership,  Social,  and  Instruction  Commit- 
tees shall  hold  office  for  one  year,  or  until  their  successors  are  appointed 
or  elected.  The  Safety  Committee,  with  the  exception  of  the  chairman, 
shall  hold  office  for  one  year,  or  until  its  successor  is  appointed. 

SEC.  4.  As  soon  as  the  different  committees  are  appointed,  the  presi- 
dent shall  advise  the  Mine  Safety  Engineer  of  the  Bureau  of  Mines, 
through  the  District  Engineer,  of  the  names  of  all  members  of  such  com- 
mittees, and  whenever  it  shall  be  necessary  to  change  any  committee  the 
Mine  Safety  Engineer  shall  also  be  notified  of  this  fact  through  the 
District  Engineer. 


A  PROPOSED  FIRST-AID  ORGANIZATION  601 


ARTICLE  Nil—  Reports 

SECTION  1.  All  officers  and  committees  shall  make  a  written  report  of 
the  work  done  by  them  at  least  once  a  year,  and  the  president  of  the 
Society  shall  render  a  written  report,  under  oath,  to  the  Director  of  the 
Bureau  of  Mines,  through  the  District  Engineer  of  the  district  in  which 
the  Society  is  located,  covering  work  done  by  the  Society  for  a  period 
ended  June  30  of  each  year.  The  secretary  shall  keep  an  accurate  account 
of  the  number  of  members  present  at  each  meeting,  and  also  an  account 
of  the  work  done  by  each  member.  He  shall  report  these  facts  to  the 
president  at  the  first  meeting  of  the  Society  after  June  30  of  each  year, 
and  the  president  shall  promptly  transmit  said  information  with  his 
annual  report  to  the  Director. 

SEC.  2.  A  mouthly  report  shall  be  rendered  by  the  president  of  the 
Society  to  the  District  Engineer  of  the  district  in  which  his  Society  is 
located,  giving  such  information  as  may  be  required  by  the  Bureau  of 
Mines. 

SEC.  3.  A  monthly  report  shall  also  be  rendered  by  the  chairman  of 
the  Safety  Committee  to  the  management  of  the  mine,  setting  forth 
such  conditions  in  or  about  the  mine  as  the  Society  deem  to  be  dangerous, 
and  suggesting  a  suitable  rule  or  rules  to  eliminate  such  unsafe  condi- 
tions. In  case  the  danger  is  considered  of  such  a  nature  as  to  warrant 
it,  a  special  report  may  be  made  by  the  chairman  of  the  Safety  Com- 
mittee at  any  time,  calling  attention  to  the  danger,  and  suggesting  the 
enforcement  of  proper  rules  to  meet  it. 

ARTICLE  \lll-Election8 

The  officers  of  the  Society  shall  be  elected  annually,  at  the  second 
regular  meeting  of  the  Society  after  June  30  of  each  year,  and  when 
elected  shall  constitute  an  Executive  Committee  to  appoint  the  members 
of  the  other  committees.  Provided  that  a  special  election  may  be  called 
to  fill  any  vacancy  that  may  occur  during  the  year.  The  president  shall 
be  the  chairman  of  the  Executive  Committee. 

ARTICLE  IX—  Meetings 

The  Society  shall  meet  at  least  once  every  week  for  the  purpose  of 
studying  first-aid  methods  and  practicing  same,  and  also  to  study  safety 
principles.  The  meeting  shall  continue  in  session  for  at  least  one  hour, 
the  first  15  minutes  to  be  devoted  to  reading  the  minutes  of  the  past 
meeting  and  to  a  general  discussion  of  the  "good  of  the  order."  The 
next  15  minutes  shall  be  devoted  to  reviewing  and  reciting  that  part  of 
the  study  course  covered  since  the  last  meeting,  and  the  remainder  of 
the  time  devoted  either  to  actual  first-aid  practice  and  demonstrations 
or  to  talks  or  lectures  on  the  principles  of  first-aid  and  safety  work. 

ARTICLE  X—  Accident  Reports 

SECTION  1.  Whenever  any  member  of  the  Society  shall  be  called  upon 
to  render  first-aid  treatment  he  shall  make  a  detailed  report  to  the  secre- 


602         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

tary  of  the  Society.  Said  report  shall  contain  the  following  information : 
Date  of  accident;  nature  of  injury;  cause  of  accident;  treatment  rendered, 
and  remarks.  The  secretary  of  the  Society  shall  enter  this  information 
on  a  proper  blank  to  be  furnished  him,  and  shall  transmit  same,  under 
oath,  with  his  report  to  the  president,  who  shall  in  turn  transmit  same 
with  his  annual  report  to  the  Director  of  the  Bureau  of  Mines. 

SEC.  2.  The  treatment  given  an  injured  person  by  a  member  of  the 
organization  shall  be  thoroughly  discussed  at  the  time  the  injury  is 
entered  upon  the  records  by  the  secretary,  in  order  to  determine  whether 
or  not  the  treatment  was  correct  and  the  best  possible  treatment  that 
could  have  been  given.  Also,  discussion  shall  be  had  as  to  how  the  acci- 
dent could  have  been  avoided  by  the  use  of  proper  care  or  the  enforce- 
ment of  proper  rules. 

ARTICLE  XI— Rules 

SECTION  1.  The  members  of  the  Society  shall  abide  by  the  rules  and 
regulations  laid  down  by  the  United  States  Bureau  of  Mines  for  the  con- 
duct of  such  organizations.  Such  additional  rules  may  be  adopted  as 
may  seem  fit  by  a  majority  of  the  members  of  the  Society,  provided  such 
rules  do  not  conflict  with  the  rules  of  the  Bureau  of  Mines,  and  provided 
that  a  copy  of  such  rules  be  immediately  furnished  the  Mine  Safety  En- 
gineer of  the  Bureau  through  the  District  Engineer.  Provided,  also, 
that  the  Bureau  of  Mines  may  revoke  any  rule  adopted  by  the  Society 
if  it  sees  fit. 

SEC.  2.  Violation  of  the  rules  of  this  Society,  or  of  any  safety  rule 
which  the  Company  has  in  force,  will  subject  the  offending  party  to  such 
punishment  as  the  Society  may  by  properly  adopted  rules  provide.  In 
case  of  flagrant  violation  the  offending  party  shall  be  subject  to  dismissal 
from  the  Society.  What  violation  shall  constitute  sufficient  cause  for 
dismissal  shall  be  decided  by  the  majority  of  the  members  of  the  Society 
after  all  the  facts  have  been  presented  to  them. 

ARTICLE  XII— Authorities 

On  all  questions  regarding  first-aid  and  safety-first  methods,  and  on 
any  other  questions  that  may  arise  in  this  Society  and  which  cannot  be 
settled  to  the  satisfaction  of  the  Society,  the  Bureau  of  Mines  shall  be 
the  authority,  and  its  decision  shall  be  final  on  all  points. 

ARTICLE  XIII— Dismissal 

Whenever  any  member  of  this  Society  shall  move  to  another  camp,  the 
president  shall,  at  his  request,  grant  to  him  letter  of  dismissal,  stating 
that  he  is  a  member  in  good  and  regular  standing,  and  give  the  work 
that  he  has  done  with  the  Society  during  the  time  he  has  been  connected 
with  it. 


A  PROPOSED  FIRST-AID  ORGANIZATION  603 

RULES  FOR  DETERMINING  STANDING  OF  A  SOCIETY 

RULE  1.  Whenever  a  Society  has  faithfully  carried  out  the  provisions 
of  the  above  constitution  for  a  period  of  one  year,  ending  June  30th,  and 
the  provisions  contained  in  Rule  6,  following,  such  members  as  have  com- 
pleted the  required  books  of  the  study  course  and  having  been  present 
at  least  50  per  cent,  of  the  meetings  shall  be  awarded  proper  certifi- 
cates stating  that  they  are  members  of  an  "A-l  Safety  Society." 

RULE  2.  The  individual  members  of  the  Society  who  shall  have  the 
highest  general  average  for  the  State  in  which  the  Society  is  located, 
and  who  have  completed  the  required  books  in  the  study  course,  and  have 
attended  at  least  50  per  cent,  of  the  meetings  of  the  Society,  shall  receive 
a  proper  certificate  stating  that  the  said  members  are  members  of  the 
"Master  Safety  Society  of  the  State  of for  the  year " 

RULE  3.  The  individual  members  of  the  Society  who  shall  obtain  the 
highest  general  average  for  the  United  States,  and  have  completed  the 
required  books  of  the  study  course,  and  have  been  present  at  least  50 
per  cent,  of  the  regular  meetings  of  the  Society,  shall  receive  a  proper 
certificate  stating  that  the  said  members  are  members  of  the  "Master 
Safety  Society  of  the  United  States  for  the  year  . . . ,"  and,  further,  each 
member  receiving  said  certificate  shall  receive  an  appropriate  medal  to 
the  same  effect. 

RULE  4.  Any  person  holding  three  annual  certificates  of  membership 
in  an  A-l  Society  and  who  has  completed  the  entire  study  course  of  the 
Bureau  of  Mines,  and  holds  a  certificate  in  Mine  Rescue  Work  issued  by 
the  Bureau  of  Mines,  shall  be  entitled  to  a  certificate  as  a  "Master  Safety 
Man." 

RULE  5.  Any  person  holding  the  certificate  "Master  Safety  Man"  shall 
be  a  life  member  of  this  Society  and  be  entitled  to  all  the  benefits  and 
privileges  as  such. 

RULE  6.  In  order  to  be  entitled  to  "A-l"  certificates  the  Society  must 
fulfill  the  following  requirements : 

1.  Hold  a  meeting  at  least  once  every  week. 

2.  Have  an  average  attendance  during  the  year  of  50  per  cent,  of  the 
membership  of  the   Society.      (The  rating  on  attendance  will  be  on   a 
basis  of  100  points,  a  50  per  cent,  attendance  giving  50  points,  etc.) 

3.  Have  an  average  attendance  of  50  per  cent,  of  its  membership  taking 
the  study  course  and  completing  at  least  two  of  the  books  each  year. 
(Study  course  will  be  rated  same  as  attendance.) 

4.  Written  reports  must  be  filed  with  the  president  at  least  once  every 
year  by  the  different  committees,  stating  just  what  work  has  been  done 
by  each.     The  secretary  must  submit  a  detailed  report,  under  oath,  to 
the  president  at  the  close  of  the  year,  giving  the  work  done  by  the  indi- 
vidual members  of  the  Society,  and  must  also  furnish  the  president  with 
such  information  as  will  enable  him  to  comply  with  Rule  6,  paragraph  6. 

5.  The  president  of  the  Society  must  make  an  annual  report  under  oath 
to  the  Director  of  the  Bureau  of  Mines,  through  the  District  Engineer 


604         PROCEEDINGS  OP  AMERICAN  MINING  CONGRESS 

having  charge  of  the  district  in  which  the  Society  is  located,  transmitting 
all  the  details  necessary  to  determine  the  standing  of  his  Society. 

6.  The  president  of  the  Society  shall  also  submit  to  the  District  Engi- 
neer of  the  district  in  which  his  Society  is  located  a  monthly  report 
showing  the  following  information:    Number  enrolled,  number  present 
at  each  meeting  during  the  month,  and  number  taking  study  course. 

7.  The  chairman  of  the   Safety   Committee  must  submit   a   monthly 
report  to  the  management  of  the  mines,  bearing  on  the  safety  condition 
of  the  property. 

8.  Maintain  a  suggestion  box  at  some  convenient  place  about  the  mine. 

9.  Hold  a  get-together  social  at  least  once  every  three  months.     (Cer- 
tificates will  be  isued  only  to  members  of  the  Society  who  fulfill  the  above 
requirements. ) 

RULE  7.  In  determining  the  grades  of  the  societies  for  their  standing 
in  the  different  State  and  the  National  contests,  the  following  shall  be 
considered : 

1.  All  the  requirements  necessary  for  an  "A-l  Society,"  and  the  grade 
made  therein. 

2.  One  point  additional  shall  be  added  to  the  average  grade  as   an 
"A-l  Society"  for  each  first-aid  team  from  the  Society  participating  in 
first-aid  contest  or  demonstration  in  which  two  or  more  companies  take 
part:   provided  that  in  case  a  team  shall  win  first  place  in  the   con- 
test or  demonstration  there  shall  be  added   five   points  to  the  general 
average  of  the  Society  to  which  it  belongs,  in  case  a  team  wins  second 
place  there  shall  be  three  points  added  to  the  average  of  the  Society  to 
which  it  belongs,  and  in  case  a  team  wins  third  place  there  shall  be 
added  two  points  additional  to  the  standing  of  their  Society. 

3.  The  injuries  treated  shall  be  averaged  according  to  the  average 
number  of  men  in  the  Society,  and  for  the  average  number  of  accidents 
treated  per  man  there  shall  be  a  like  number  of  points  added  to  the 
standing  of  the  Society. 

4.  For  each  safety  rule  suggested  by  the  Society,  through  the  Safety 
Committee,  and  adopted  by  the  Company  and  enforced  for  three  months, 
a  credit  of  one  point  shall  be  added  to  the  standing  of  the  Society:  pro- 
vided that  a  copy  of  such  safety  rule  must  be  submitted  with  the  annual 
report  of  the  president  to  the  Bureau  of  Mines,  and  will  be  passed  upon 
as  to  whether  or  not  it  is  really  a  "safety"  rule,  or  only  a  makeshift 
for  the  purpose  of  adding  to  the  standing  of  the  Society.     No  tentative 
rule  will  be  considered.     The  rules  must  be  complete  and  adopted  with 
the  intention  of  carrying  them  out  indefinitely,  or  until  the  danger  which 
they  were  made  to  meet  has  been  done  away  with. 

5.  The  new  members  received  into  the  Society  shall  be  averaged  accord- 
ing to  the  number  of  members  in  the  organization  at  the  beginning  of 
the  fiscal  year,  and  for  the  average  number  of  new  members  received 
a  like  number  of  points  shall  be  added  to  the  standing  of  the  Society: 
provided  that  no  member  will  be  considered  a  "new  member"  unless  he 
has  carried  on  the  work  regularly  for  three  months  prior  to  the  sub- 
mission of  the  report;  provided,  further,  that  in  case  a  member  is  re- 


A  PROPOSED  FIRST-AID  ORGANIZATION  605 

ceived  into  the  Society  at  such  a  time  that  it  would  not  be  possible  for 
him  to  serve  three  months  before  the  rendering  of  the  report  on  June 
30,  said  member  shall  be  credited  to  the  standing  of  the  Society  when 
the  report  for  the  next  fiscal  year  is  made — for  instance,  if  a  man 
joined  the  Society  on  April  30  and  faithfully  carried  out  the  work  until 
July  30,  he  should  then  be  credited  to  the  Society  on  rendering  the  report 
on  the  following  June  30.  The  same  will  also  apply  to  the  safety  rules 
mentioned  in  paragraph  4  above.  Any  man  applying  for  membership 
must  be  admitted,  if  properly  qualified,  and  the  Membership  Committee 
must  do  its  duty  toward  getting  new  members  if  the  Society  is  to  stand 
as  "A-l." 

6.  A  credit  of  10  points  shall  be  allowed  the  Society  for  all  its  members 
trained  in  mine-rescue  work,  and  a  proportionate  amount  allowed  for 
any  number  less  than  the  whole  Society  which  shall  be  trained.    For  in- 
stance, if  75  per  cent,  of  the  members  are  trained  in  mine-rescue  work 
there  shall  be  added  7%  points  to  the  standing  of  the  Society. 

7.  For  subscription  to  the   National   Safety  Council   Bulletin   by  the 
Society  two  points  shall  be  added. 

8.  The  Instruction  Committee  shall  have  charge  of  the  work  of  instruct- 
ing the  members  in  first-aid  and  safety  work,  and  shall  appoint  some 
member  of  the  Society  who  is  well  qualified  to  do  so  to  have  charge  of 
the  classes  at  each  meeting.     They  shall  also  make  arrangements  for 
properly  qualified  first-aid  instructors   to  visit  their   Society   and  give 
instruction  on  the  subject,  and  should  also  arrange  for  talks  on  improved 
methods  in  first  aid,  logical  method  of  procedure  in  mine  fires,  illustrated 
lectures,  moving  pictures  as  furnished  by  the  Bureau  of  Mines,  and  dis- 
cussion from  the  superintendent  down  to  the  miner  bearing  on  the  sub- 
ject of  safety  and  first  aid  to  the  injured.    In  order  to  constitute  an  "A-l" 
Society  there  must  be  at  least  an  average  of  50  per  cent,  of  the  members 
of  the  Society  carrying  on  this  study  during  the  year,  and  completing  at 
least  two  books  of  the  study  course.     The  books  to  be  studied  are  given 
below,  and  shall  be  taken  up  in  the  following  order: 

Miners'  Circular  No.  8 — First-Aid  Instructions  for  Miners. 

American  Red  Cross  Abridged  Text-Book  on  First  Aid,  In- 
dustrial Edition. 

St.  John's  Ambulance  First-Aid  Book. 

Miners'  Circular  No.  22 — Dangerous  and  Safe  Practices  in 
Bituminous  Coal  Mines. 

Handbook — Advanced  First-Aid  Instructions  for  Miners,  U.  S. 
Bureau  of  Mines. 

Handbook — Rescue  and  Recovery  Operations  in  Mines  After 
Fires  and  Explosions. 

Technical  Paper  103 — Organizing  and  Conducting  Safety  Work 
in  Mines. 

Artificial  Resuscitation  Chart. 

Properties  of  Mine  Gases — Chart. 

Miners'  Circular  No.  9 — Accidents  for  Falls  of  Roof  and  Coal. 

Miners'  Circular  No.  10 — Mine  Fires  and  How  to  Fight  Them. 

Miners'  Circular  No.  16 — Hints  on  Coal-Mine  Ventilation. 

Miners'  Circular  No.  20 — How  a  Miner  Can  Avoid  Some  Dan- 
gerous Diseases. 


606         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Miners'  Circular  No.  21 — What  a  Miner  Can  Do  to  Prevent  Ex- 
plosion of  Gas  and  Coal  Dust. 

In  case  the  organization  shall  be  in  a  metal-mining  camp, 
Miners'  Circular  No.  17 — Accident  from  Falls  of  Rock  and  Ore- 
shall  be  substituted  for  Miners'  Circular  No.  9. 

9.  The  Social  Committee  shall  be  charged  with  arranging  for  the  social 
side  of  the  organization.    It  shall  make  arrangements  for  a  social  at  least 
once  every  three  months,  and  members  of  the  Society  should  endeavor  to 
have  as  many  of  their  friends  present  as  possible,  in  order  to  interest 
them  in  the  work  of  the  organization. 

10.  Before  granting  the  certificate  "Master  Safety  Man,"  the  applicant 
must  be  examined  by  a  representative  of  the  Bureau  of  Mines,  or  some 
one  appointed  by  the  Bureau  of  Mines,  as  to  his  knowledge  of  the  books 
embraced  in  the  study  course  and  the  general  safety  principles,  and  must 
also  hold  a  certificate  in  mine-rescue  training  issued  by  the  Bureau  of 
Mines. 

11.  Any  practicing  physician  shall  be  eligible  to  become  a  member  of 
this  Society,  but  he  shall  not  be  eligible  to  participate  in  first-aid  con- 
tests, and  no  injuries  treated  by  him  will  be  considered  under  Rule  7, 
paragraph  3,  unless  such  treatment  was  indeed  "first-aid"  and  not  treated 
as  part  of  his  regular  work  as  a  practicing  physician;  provided,  that 
all  injuries  treated  with  first  aid  by  a  physician  member  of  a  Society 
must  be  submitted  on  a  separate  blank,  giving  in  the  "Remarks"  column 
a   brief  statement   showing  that  the  injury  actually   received  first-aid 
treatment.     This  report  shall  be  passed  upon  by  the  Mine  Surgeon  of 
the  Bureau  of  Mines,  and  any  injury  not  considered  as  receiving  first- 
aid  treatment  will  be  stricken  out. 

12.  SECTION  1 — If  there  is  a  Safety  Inspector  or  Safety  Engineer  or 
other  corresponding  person  in   the  organization,  such  person  shall  be 
appointed    by    the    Executive    Committee    as    chairman    of    the    Safety 
Committee. 

SEC.  2 — If  there  is  no  Safety  Inspector  or  other  corresponding  person 
in  the  organization,  and  there  is  a  mine  foreman  or  assistant  mine  fore- 
man in  the  organization,  the  Executive  Committee,  unless  it  has  good 
reason  for  doing  otherwise,  shall  appoint  said  mine  foreman  or  assistant 
mine  foreman  as  chairman  of  the  Safety  Committee. 

13.  SECTION   1 — The  members  of  the   Safety  Committee  shall  report 
to  their  chairman  any  condition  that  they  may  deem  unsafe,  and  the 
chairman  shall  report  same  to  the  Society.     If  a  majority  of  the  Society 
so  vote,  the  chairman  of  the  Safety  Committee  shall,  at  the  end  of  the 
month,  notify  the  management  of  such  condition  and  recommend  such 
rules  as  in  the  opinion  of  the  Society  would  relieve  the  situation. 

SEC.  2 — In  case  the  situation  demands  immediate  action,  the  chairman 
of  the  Safety  Committee  shall  make  a  special  report  to  the  management 
with  suitable  recommendations.  A  report  must  be  made  once  each  month, 
whether  or  not  unsafe  conditions  exist. 

14.  The  report  to  the  management  shall  be  confidential  and  need  not 
be  made  public,  but  any  safety  rule  adopted  by  the  Company  at  the  sug- 


A  PROPOSED  FIRST-AID  ORGANIZATION  607 

gestion  of  the  Society  must  be  transmitted  with  the  annual  report  of  the 
president  to  the  director,  and  also  a  short  statement  showing  the  dan- 
gerous condition  which  the  rule  is  intended  to  meet. 

15.  The  members  of  the  Safety  Committee  shall  during  the  time  they 
are  in  office  make  special  efforts  to  find  any  unsafe  conditions  that  may 
be  existing  in  the  neighborhood  of  the  mine.    Any  member  of  the  Society 
who  shall  know  of  any  unsafe  conditions  existing  at  the  plant  shall 
promptly  notify  a  member  of  the  Safety  Committee. 

16.  A  suggestion  box  must  be  maintained  at  all  times  in  some  con- 
venient place  where  any  suggestions  that  any  member  or  any  other  person 
at  the  camp  may  wish  to  make  can  be  deposited  without  disclosing  the 
name  of  the  person  making  the  suggestion.    Suggestions  for  safety  rules 
may  be  handled  in  this  manner,  if  the  one  making  the  suggestion  does 
not  desire  to  disclose  his  name. 

17.  In  case  a  representative  of  the  Bureau  of  Mines  is  not  present 
when  the  Society  is  organized,  the  president  of  the  Society  shall  promptly 
transmit  to  the  Mine  Safety  Engineer,  through  the  District  Engineer, 
the  names  of  the  officers,  committees,  and  also  a  list  of  the  names  of  all 
men  in  the  Society.     He  must  also  give  the  date  on  which  the  Society 
will  hold  its  regular  meetings. 

18.  Whenever  any  member  who  has  moved  from  one  camp  to  another 
shall  present  to  the  president  of  the  Society  at  the  latter  camp  his  letter 
of  dismissal  provided  for  in  Article  13  of  the  constitution,  said  president 
shall  enter  the  person  so  presenting  the  letter  as  a  member  of  his  Society 
in  good  and  regular  standing.     After  such  person  has  carried  on  the 
work  in  this  Society  for  three  months  as  provided  in  Rule  7,  paragraph 
€,  he  may  be  counted  in  the  annual  report  as  a  "new  member"  and  the 
Society  shall  receive  proper  credit  as  such. 


Explanation  of  Ratings 

The  following  will  illustrate  the  method  of  rating  a  Society : 
Assume  that  a  Society  had  an  average  membership  of  20, 
and  that  during  the  year  there  was  an  average  attendance  of 
80  per  cent,  of  the  membership  and  that  70  per  cent,  of  the 
membership  took  the  study  course.  Five  safety  rules  were 
adopted  by  the  Company  at  the  suggestion  of  the  Society.  Five 
new  members  were  received  into  the  Society.  A  total  of  50 
injuries  were  treated  during  the  year.  A  first-aid  team  from 
the  Society  won  first  place  at  the  State  contest.  Fifty  per  cent, 
of  the  members  held  mine-rescue  certificates.  The  Society  sub- 
scribed for  the  National  Safety  Council  Bulletin.  The  rating 
of  the  Society  would  be  as  follows : 


608         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Attendance    80 

Study  Course   70 


Total 150 

Divided  by  2,  the  number  of  subjects  covered  would 

give  a  standing  in  the  A-l  grade  of 75% 

Add  for  Injuries  Treated   2^ 

Add  for  First- Aid  Contest  5 

Add  for  Sub.  to  N.  S.  C.  B 2 

Add  for  Safety  Rules    5 

Add  for  Mine-Rescue  Certificate 5 

Add  for  New  Members   0  x/4 


Total 19% 

19% 

Total  Points  Won  by  Society 94% 

In  order  to  reduce  clerical  work  to  the  minimum  each  Society 
should  be  required  to  figure  its  own  standing  and  submit  a 
proper  blank,  so  that  it  would  only  be  necessary  to  check  the 
work  for  mistakes.  This  work  would  pass  through  the  hands 
of  the  District  Engineer,  who  could  turn  it  over  to  the  foreman 
miner  for  checking,  and  who  could  arrange  the  different  socie- 
ties in  their  proper  order  before  submitting  them  to  the  Mine 
Safety  Engineer.  This  work  would  come  during  the  hot 
weather,  when  it  is  difficult  to  get  men  to  take  training,  and  at 
a  time  when  the  field  men  are  not  rushed  with  other  work  that 
this  grading  of  papers  would  interfere  with. 

The  monthly  report  to  be  made  to  the  District  Engineer  would 
keep  him  informed  at  all  times  of  the  standing  of  the  societies 
in  his  district,  and  would  give  him  an  opportunity  to  send  help 
to  any  Society  that  showed  signs  of  losing  interest  in  the  work. 

The  examination  after  the  three  years'  work  has  been  com- 
pleted could  be  held  in  central  parts  of  the  district  similar  to 
the  way  the  present  civil  service  examinations  are  held,  except 
that  the  foreman  miner  would  pass  upon  the  applicants'  knowl- 
edge of  the  work  and  submit  his  recommendation  regarding  the 
issuing  of  certificates. 

The  requirement  that  the  societies  keep  an  account  of  the 
injuries  treated  by  their  members  and  submit  such  account  to 
the  director,  in  addition  to  adding  to  the  interest  and  enthu- 
siasm of  the  Society,  would  cause  the  men  to  take  a  pride  in 


A  PROPOSED  FIRST-AID  ORGANIZATION  609 

their  work,  and  to  perform  it  in  the  best  possible  manner,  as 
they  would  suppose  it  would  be  reviewed  by  men  with  expert 
knowledge  of  the  subject.  This  would  also  give  the  Bureau 
some  definite  figures  to  work  on  as  to  the  real  practical  results 
of  its  first-aid  work.  It  would  also  be  of  interest  to  the  public 
if  the  Bureau  could  issue  a  statement  giving  the  number  of 
broken  arms,  legs  or  other  bones,  etc.,  that  had  been  treated  by 
men  which  it  had  trained  in  first-aid  work.  The  safety  rules 
would  likewise  prove  valuable  in  this  respect  and  would  also 
furnish  valuable  information  for  publications. 

In  order  to  secure  the  best  possible  results  under  the  plan 
outlined  it  would  be  necessary  that  the  heartiest  co-operation 
be  received  from  the  management  of  the  mines.  This  should  be 
more  easily  secured  now  than  ever  before,  in  view  of  the  re- 
quirements of  the  insurance  companies  writing  compensation 
insurance,  which  reduce  the  premium  according  to  number  of 
men  trained. 

The  organization  should  also  be  kept  as  simple  as  possible,  as 
the  work  will  be  carried  out  in  the  main  by  men  not  at  all 
familiar  with  duties  of  this  kind,  and  if  made  too  complicated 
they  are  likely  to  be  afraid  to  undertake  the  work  at  all. 

The  following  form  is  submitted  for  guidance  of  organizers : 

A  PROPOSED  FIRST-AID  AND  MINE-SAFETY  SOCIETY 
ORGANIZATION 

BY 

J.  J.  RUTLEDGE,  MINING  ENGINEER,  U.  S.  BUREAU  OF  MINES, 
McALESTER,  OKLAHOMA 

AND 

NOEL  HUBBARD,  CHIEF  CLERK,  U.  S.  BUREAU  OF  MINES, 
GOLDEN,  COLORADO 

Suggested  Constitution  for  a  Safety  Society  organized  among  the 
miners  and  other  employes  of  Coal  Company. 

Purpose  of  the  Organization — To  train  members  in  principles  of  first 
aid  to  the  injured  and  mine  safety,  and  better  conditions  generally  in 
the  miners'  lives. 


PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Those  available  for  membership  who  have  taken  Bureau  of  Mines 
training  or  have  signified  their  intention  of  so  doing. 

Pledge  taken  by  members. 

No  initiation  fee.  Dues  $1.00  per  year,  payable  in  quarterly  install- 
ments in  advance. 

OFFICERS — President,  V 'ice-President,  Secretary  and  Treasurer;  elected 
annually. 

COMMITTEES  : 

EXECUTIVE  COMMITTEE — Consisting  of  President,  Vice-President,  Secre- 
tary and  Treasurer. 

MEMBERSHIP  COMMITTEE — Three  members. 

INSTRUCTION  COMMITTEE — Three  members. 

SOCIAL  COMMITTEE — Three  members. 

SAFETY  COMMITTEE — Consisting  of  one-fourth  of  the  active  members 
of  the  Society. 

The  duties  of  the  Membership  Committee  shall  be  to  seek  to  interest 
others  in  first-aid,  mine-rescue  and  mine-safety  instruction,  and  thus 
increase  the  membership  of  the  Society. 

The  V ice-President  shall  be  Chairman  of  the  Instruction  Committee, 
and  the  duties  of  this  committee  shall  be  to  make  arrangements  for  study 
courses,  lectures,  etc.,  on  first  aid  and  mine  safety  for  the  benefit  of  the 
members  of  the  Society. 

The  Social  Committee  shall  take  care  of  the  social  side  of  the  organiza- 
tion. 

The  Safety  Committee  shall  be  charged  with  general  safety  work 
around  the  mine  so  far  as  the  Society  is  concerned. 

The  Executive,  Membership,  Social  and  Instruction  Committees  shall 
hold  office  for  one  year,  or  until  their  successors  are  appointed  or  elected. 

The  Safety  Committee,  with  exception  of  the  Chairman,  shall  hold  office 
for  three  months. 

Reports — All  officers  and  committees  shall  make  a  written  report  of 
the  work  done  by  them  at  least  once  a  year,  reports  to  be  made  to  the 
Director  of  the  United  States  Bureau  of  Mines  concerning  the  attendance 
at  meetings,  character  of  work  done  both  at  meetings  and  in  safety  work 
in  the  mine. 

Officers  of  the  Society  shall  be  elected  annually,  at  the  second  regular 
meeting  of  the  Society  after  June  30  of  each  year.  Special  elections  to 
fill  any  vacancy  that  may  occur  during  the  year  may  be  called  at  any 
time. 

Meetings  shall  be  held  once  every  week  and  shall  be  for  the  study  and 
practice  of  first-aid  and  mine-safety  principles. 

Accident  Reports — When  any  member  of  the  Society  is  called  on  to 
i-ender  first-aid  treatment,  he  shall  make  a  detailed  report  to  the  Secre- 
tary of  the  Society  regarding  treatment  given  and  nature  of  injury. 

Rules — Members  of  Society  shall  abide  by  the  rules  and  regulations 
laid  down  by  the  United  States  Bureau  of  Mines  for  conducting  such 
organizations.  Discipline  of  members. 


A  PROPOSED  FIRST-AID  ORGANIZATION  611 

Transfer  of  Membership — Provision  made  for  change  of  location  of 
any  member. 

Rules  for  Determining  Standing  of  a  Society — Percentages  reckoned 
on  work  done  and  members  present  at  meetings.  Chairman  of  Safety 
Committee  to  make  a  monthly  report  to  the  management  of  the  mine 
bearing  on  the  safety  condition  of  the  property. 

Suggestion  Box — Provision  made  for  submitting  suggestions  regarding 
improvements  in  safety  conditions. 

First-Aid  and  Mine-Rescue  Contests — Provision  made  for  participa- 
tion therein. 

Standing  of  Societies — To  be  arrived  at  on  a  percentage  basis,  attend- 
ance at  weekly  meetings,  contests,  and  first-aid  treatment  given  to  be 
marked.  Members  to  be  given  certificates  of  merit. 

Standard  of  Marking  determining  an  A-l  Society. 

Method  of  Choosing  Members  of  Safety  Committee — A  member  may 
serve  on  the  Safety  Committee  only  once  each  year.  Members  of  Safety- 
Committee  to  report  to  Chairman  any  conditions  they  deem  unsafe  and 
Chairman  to  report  to  the  Society.  If  majority  of  Society  so  vote,  Chair- 
man of  Safety  Committee  shall,  at  end  of  month,  notify  management  of 
mine  of  any  unsafe  conditions  and  recommend  rules  to  relieve  conditions* 
Special  and  immediate  report  to  be  made  if  necessary. 


612         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

DOES  "SAFETY  FIRST"  MEAN  INCREASED  DIVIDENDS? 
By  W.  D.  RYAN,  Commissioner  of  Safety,  U.  S.  Bureau  of  Mines 

I  think  I  am  safe  in  saying  that  since  I  arrived  in  St.  Louis 
I  have  met  a  number  of  coal-mining  men  who  might  increase 
their  income  and  improve  their  social  and  economic  conditions 
by  going  down  to  Akron,  Ohio,  and  getting  a  job  with  the 
Goodyear  Tire  and  Rubber  Company.  [Applause.] 

My  subject — I  discovered  what  it  was  going  to  be  after  I 
got  here — is  in  the  shape  of  a  question  rather  than  a  text: 
"Does  'Safety  First'  Mean  Increased  Dividends?"  I  would,  if 
I  followed  my  own  inclinations  at  this  time,  answer  the  ques- 
tion with  one  word — "Yes."  But  whoever  wrote  the  text  must 
have  had  in  mind  that  those  who  control  and  operate  the 
mining  industry  of  this  country  always  got  dividends  and  all 
they  want  is  increased  dividends. 

I  am  only  going  to  take  a  few  minutes  of  your  time,  but  I 
want  to  ask  those  who  are  interested  in  this  work,  and  that 
means  all  of  you,  not  to  consider  the  question  of  dividends  in 
connection  with  safety  work.  I  do  not  believe  that  those  who 
have  charge  of  our  great  industrial  institutions,  so  far  as 
safety  is  concerned,  should  be  guided  by  dollar  returns.  I  do 
not  think  it  should  be  considered  with  the  work  in  any  shape 
or  manner. 

Dr.  Rutledge  has  given  you  a  few  citations  showing  where 
"Safety  First"  paid  and  paid  well,  and  I  want  to  say  to  you, 
my  friends,  that  he  could  have  gone  further.  I  remember  one 
occasion,  in  the  State  of  Oklahoma,  where  the  law  specifically 
required  that  the  shot  firer  must  place  a  cartridge  in  the  drill 
hole  and  tamp  the  shot.  I  remember  one  night  a  shot  firer 
fired  85  shots  in  45  minutes,  where  the  law  required  that  the 
shot  firer  should  tamp  those  shots.  The  eighty-fifth  shot  got 
him,  and  his  remains  were  turned  over  to  the  coroner.  He  was 
in  a  hurry  to  get  out,  and  in  that  case  the  miners,  the  foremen 
and  the  shot  firer  were  all  violating  the  State  law  of 
Oklahoma. 

Another  case  the  doctor  cited  this  morning:  An  explo- 
sion occurred  in  the  State  of  Oklahoma,  where  a  number  of 


DOES  "SAFETY  FIRST"  MEAN  INCREASED  DIVIDENDS?    613 

men  were  killed.  The  shot  firers  were  permitted  to  go  into 
the  mine  and  fire  their  shots  while  other  workmen  were  in  the 
mine,  and  all  those  in  the  mine  were  killed.  Another  violation 
of  the  law. 

I  notice  here  in  the  latest  reports  covering  the  accidents  in 
the  coal  and  metal  mines  of  this  country  that  we  are  making 
some  progress.  In  the  year  1918,  276  men  were  killed  in  the 
month  of  July  in  the  coal  mines  of  this  country.  The  same 
month  in  1919  the  number  is  207.  It  may  be  true  that  the 
mines  were  working  more  steadily  in  1918  than  in  1919,  but 
I  rather  think  that  the  difference  does  not  account  for  the 
large  reduction  in  the  number  of  accidents. 

Seventy-five  Per  Cent,  of  Accidents  Preventable 

Now,  I  take  this  position,  my  friends,  and  I  think  all  of  you 
who  have  studied  this  question  of  industrial  accidents  will 
agree  with  me — that  75  per  cent,  of  all  industrial  accidents 
are  preventable.  I  want  you  to  get  that  and  think  it  over, 
and  if  you  find  that  I  am  wrong,  I  want  you  to  let  me  know 
where  I  am  wrong.  We  have  been  killing  12,000  people  on  the 
railroads  of  this  country  every  year,  and  injuring  200,000 
others  every  year,  many  of  whom  die  later  as  a  result  of 
their  injuries.  Now,  9,000  of  those  killed,  or  75  per  cent.,  con- 
sist of  men,  women  and  children  walking  on  or  crossing  the 
railroad  tracks,  or  employees  going  to  and  from  their  employ- 
ment; and  the  other  3,000,  or  25  per  cent.,  consist  of  those 
who  are  killed  traveling  as  passengers  or  employees  at  their 
work.  There,  I  think,  is  a  plain  case  where  75  per  cent,  of  the 
railroad  accidents  ought  to  be  eliminated.  Those  of  you  who 
were  born  in  Europe,  or  who  have  had  occasion  to  go  over 
there,  know  that  no  such  accident  rate  takes  place  in  the 
British  Isles  or  in  France  or  any  of  the  European  countries 
where  they  have  railroad  service.  People  are  not  permitted 
to  use  the  railroads  as  highways,  and  they  ought  not  to  be 
permitted  to  use  the  railroads  as  highways  in  this  country. 

United  States  Leads  in  Industrial  Accidents 

The  day  is  coming  when  more  stringent  action  will  be  taken 
in  order  to  conserve  human  life  in  the  United  States.  We  kill 
more  people  in  our  industries  in  this  country  that  are  classed 


614         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

as  industrial  accidents  than  in  any  other  country  in  the  world 
employing  a  like  number  of  men  and  women. 

The  question  set  forth  as  my  subject  this  morning  brings 
to  my  mind  another  phase  of  the  situation  on  which  I  have  had 
some  disagreement  with  some  of  my  mining  friends,  and 
that  is  the  question  of  having  a  safety  engineer  or  foreman, 
or  whatever  you  may  term  him,  in  all  our  large  coal  and  metal 
mines. 

I  advocate,  and  I  think  I  am  right,  that  such  a  man  should 
be  employed  with  absolute  authority  to  order  the  remedying 
of  any  unsafe  conditions  he  may  find  in  the  mine,  without 
regard  to  the  opinion  of  the  foreman  or  anyone  else  in  or 
around  that  mine.  This  question  I  have  raised  on  former 
occasions,  and  exception  has  been  taken  to  it,  for  the  reason 
that  the  safety  men  might  interfere  with  the  work  of  the 
foremen.  I  favor  this  plan  because  there  is  a  direct  line  that 
can  be  maintained  between  the  two  parties. 

I  had  occasion  to  be  in  the  West  not  long  ago  on  a  mission 
for  the  Bureau  of  Mines,  looking  up  some  matters  along  this 
same  line.  I  was  making  an  investigation  at  a  large  metal 
mine.  I  found  they  had  a  safety  commissioner ;  he  was  paid  a 
fairly  good  salary  for  his  work,  and  I  got  one  of  his  printed 
reports.  In  that  report  he  had  outlined  one  very  unsafe  con- 
dition that  he  found  in  one  of  the  large  mines  operated  by  his 
company,  a  place  where  workmen  had  to  travel  back  and  forth 
underneath  a  raised  platform.  He  reported  that  there  were 
several  broken  planks  in  the  platform  and  a  considerable 
amount  of  loose  rock  hanging  just  above  it,  with  workmen 
passing  backward  and  forward  underneath  the  platform  all 
day,  at  least  at  intervals  through  the  day. 

His  report  went  to  the  superintendent;  the  superintendent 
when  he  got  time  took  it  up  with  the  general  manager,  and 
when  the  general  manager  got  time  he  told  the  superintendent 
how  to  remedy  the  situation,  and  when  the  superintendent 
got  time  he  sent  word  back  to  the  foreman  giving  him  his 
instructions.  In  the  meantime  any  number  of  men  might 
have  been  caught  there  and  killed,  as  the  unsafe  condition  had 
not  been  remedied.  I  say  that  inspector  should  have  had 
authority  to  undo  the  unsafe  condition  the  moment  he  found  it. 


DOES  "SAFETY  FIRST"  MEAN  INCREASED  DIVIDENDS?    615 

Safety  Expert  Reduces  Accidents 

I  know  of  another  case  where  a  practical  mining  man  was 
employed  as  safety  commissioner  for  a  large  coal-mining 
operation  having  some  20  openings  and  employing  several 
thousand  men.  We  had  a  record  of  the  accidents  in  this 
company's  mines  for  three  years  before  that  man  took  charge. 
We  got  a  record  of  the  accidents  for  the  first  three  years  that 
he  was  on  the  job,  with  the  same  number  of  openings,  with 
the  same  number  of  employees.  He  had  decreased  the  acci- 
dents in  the  mines  operated  by  that  company  65  per  cent.,  but 
he  had  absolute  authority  and  reported  to  no  one  but  the 
general  manager  of  the  company. 

I  believe,  if  the  mining  interests  of  the  United  States  will 
adopt  such  a  plan,  that  you  will  come  pretty  near  realizing 
that  you  can  reduce  your  mine  accidents  from  65  to  75  per 
cent,  throughout  the  United  States. 

I  sincerely  trust  that  more  attention  in  the  future  will  be 
paid  to  the  reduction  of  accidents. 


616         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  OIL  SHALE  INDUSTRY 

By  VICTOR  C.  ALDERSON,  President,  Colorado  School  of  Mines, 

Golden,  Col. 

Recent  years  have  been  filled  with  stirring  and  far-reaching 
events,  world-wide  in  their  effect,  not  the  least  of  which  has 
been  the  birth  of  a  new  industry,  with  a  potential  supply  of 
raw  material  that  almost  defies  mathematical  computation  and 
staggers  the  imagination.  Can  oil  wells  produce  enough  to 
meet  the  enormous  demand  now  existing  for  oil  and  its 
products?  The  answer  is  doubtful.  Will  new  oil  fields  be 
discovered  to  meet  the  increased  demand  in  the  future?  The 
answer  is  extremely  doubtful.  Yet  this  is  the  age  of  oil.  Oil 
we  must  have.  The  supply  must  come  from  our  great  deposits 
of  oil  shale.  If  oil  is  the  "king,"  then  oil  shale  is  the  "heir 
apparent." 

Present  Condition  of  the  Petroleum  Industry 

From  1857  the  total  of  the  world  production  of  petroleum 
was  6,996,674,563  barrels ;  of  this  the  United  States  produced 
4,252,644,003  barrels.  There  are  now  approximately  250,000 
producing  oil  wells  in  the  United  States.  The  average  yield 
is  only  four  and  a  half  barrels  a  day.  Among  the  great  pro- 
ducers is  the  Burkburnett  pool  in  Texas  that  has  produced 
7,000,000  barrels  of  oil  and  the  Ranger  pool  that  has  produced 
12,000,000  barrels.  The  average  output  in  Wyoming  is  40  bar- 
rels a  day.  The  low  average  for  the  whole  country  of  only 
four  and  a  half  barrels  a  day  is  caused  by  thousands  of  wells 
in  the  older  fields  that  produced  less  than  a  quarter  of  a  barrel 
a  day.  Of  the  total  number  of  wells  in  the  United  States, 
four-fifths  do  not  yield  more  than  a  barrel  of  oil  a  day. 

The  United  States  Bureau  of  Mines  recently  made  a  report 
to  the  Secretary  of  the  Treasury  on  the  subject,  in  which  it 
said: 

"The  United  States  Geological  Survey  makes  the  pessimistic 
report  that  our  underground  reserves  are  40  per  cent,  ex- 
hausted and  that  we  probably  are  near  the  peak  of  domestic 


THE  OIL  SHALE  INDUSTRY  617 

production.  The  consumption  of  petroleum  is  increasing  far 
more  rapidly  than  domestic  production.  During  1918, 39,000,000 
barrels  of  oil  were  imported  from  foreign  countries  and 
27,000,000  barrels  were  withdrawn  from  stocks. 

"Our  future  supply  of  petroleum  must  be  conserved,  and  it  is 
therefore  imperative  that  the  United  States  make  every  pos- 
sible effort  to  further  more  efficient  conservation  of  our  under- 
ground reserves  of  oil  and  the  more  efficient  utilization  of 
petroleum  and  its  products,  because: 

"First — Petroleum  has  become  the  fundamental  basis  of  the 
industrial  and  military  life  of  the  nation,  in  that  gasoline  has 
become  the  motive  power  for  some  six  million  automobiles  and 
trucks,  for  airplanes,  farm  tractors,  motor  boats,  etc.  Fuel  oil 
has  become  necessary  for  our  navy,  our  merchant  marine  and 
larger  industrial  plants.  Lubricating  oil  is  essential  for  ma- 
chinery of  all  kinds,  and  without  it  not  a  wheel  would  turn. 

"Second — The  potential  supplies  of  crude  oil  outside  of  the 
United  States  are  passing  almost  entirely  into  the  political  and 
economic  control  of  foreign  governments,  and  the  United 
States  is  likely  to  pass  from  a  position  of  dominance  into  a 
position  of  dependence. 

"Third — Investigations  of  tho  Bureau  of  Mines,  of  the  Fuel 
Administration  and  of  other  bodies  have  disclosed  that  the 
known  oil  reserves  of  the  United  States  are  not  receiving  ade- 
quate protection  and  are  being  wasted  through  inefficient 
methods  in  production,  refining  and  utilization  of  the  oil. 

"For  the  above  reason  it  is  imperative  that  the  United 
States  take  every  step  possible  toward  conserving  our  known 
reserves  of  oil.  Petroleum  and  natural  gas  are  not  being 
replaced  by  nature,  and  once  gone  cannot  be  replaced  except 
from  sources  involving  greater  costs." 

Many  other  significant  facts  could  be  given,  but  a  few  will 
suffice. 

Total  Number 
of  Registered 

Automobiles  in  Production  of 

the  United  States.  Gasoline. 

1914 1,700,000  1,560,037,200  gallons 

1918 6,146,000  3,570,312,963  gallons 


618         PKOCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Statistics  furnished  by  the  United  States  Geological  Survey 
give  the  following  interesting  comparison : 

Amount  of  Crude  Oil 
in  Storage. 

December  31,  1915 194,185,000  bbls. 

December  31,  1916 179,371,000  bbls. 

December  31,   1917 156,168,000  bbls. 

December  31,  1918 132,800,000  bbls. 

Amount  of  Crude  Oil 
Marketed. 

During    1915 281,104,104  bbls. 

During   1916 < 300,767,158  bbls. 

During   1917 335,315,600  bbls. 

During   1918 345,896,000  bbls. 

Thus,  during  these  four  years  the  amount  marketed  in- 
creased from  281  to  345  million  barrels;  the  reserve  supply — 
that  held  in  storage — decreased  from  194  to  132  million  bar- 
rels. This  gives  the  key  to  the  oil  situation.  Oil  pools  are 
merely  reservoirs  certain  to  become  exhausted  in  the  course 
of  a  few  years. 

Examining  the  refining  oil,  we  find  that  from  January  to 
September,  1918,  the  refineries  consumed  182,000,000  barrels. 
During  the  same  period  the  production  was  only  170,000,000 
barrels.  To  meet  this  loss  12,000,000  barrels  had  to  be  drawn 
from  storage,  or  a  million  barrels  a  month. 

In  passing  judgment  upon  the  condition  of  the  oil  industry> 
as  a  whole,  one  must  not  be  blinded  by  the  enormous  production 
of  "gushers"  nor  be  made  unduly  pessimistic  over  the  low 
average  yield  of  the  quarter  of  a  million  wells  in  the  United 
States.  A  common-sense  view  seems  to  be  that,  first,  our 
supply  of  petroleum  from  wells  is  not  meeting  the  country- 
wide demand  and  that  the  limit  of  production  is  approaching; 
second,  the  supply  from  wells  can  be  maintained  only  by  the 
discovery  of  new  extensive  pools;  third,  there  is  little  likeli- 
hood that  new  pools  like  the  Mid-Continental  or  California  will 
be  discovered,  because  the  entire  country  has  already  been 
thoroughly  explored;  fourth,  that  the  only  great  national 
reservoir  that  can  be  absolutely  depended  upon  to  supply  oil 
is  our  deposit  of  shale.  This  will  be  the  source  of  our  oil  supply 


THE  OIL  SHALE  INDUSTRY  619 

for  the  future.  Oil  shale  provides  an  almost  unlimited  supply 
of  raw  material  from  which  oil  may  be  produced.  Its  distri- 
bution is  world-wide  and  its  extent  incalculable. 

World-wide  Distribution  of  Oil  Shale 

Extensive  deposits  are  found  in  Colorado,  Utah,  Wyoming, 
Nevada,  Montana  and  California.  In  Canada  it  is  found  in 
Quebec,  New  Brunswick,  Nova  Scotia  and  Newfoundland.  In 
Scotland,  near  Edinburgh  and  on  the  Isle  of  Skye.  In  France, 
at  Auton  and  Buxiere  les  Mines.  In  South  Africa,  in  the 
Transvaal,  Mozambique  and  Natal.  Also  in  New  South  Wales, 
New  Zealand,  Tasmania,  Brazil,  Italy,  Spain,  Austria-Hungary, 
Serbia  and  Turkey. 

Amount  of  Shale  Available  in  Colorado 

To  one  fond  of  figuring  the  following  will  prove  interesting : 
An  acre  contains  43,560  square  feet.  A  seam  of  oil  shale  10 
feet  thick  would  contain  435,600  cubic  feet  of  shale.  Eighteen 
cubic  feet  of  shale  weigh  one  ton.  Hence  there  are  24,200  tons 
of  shale  in  one  acre  of  a  seam  10  feet  thick.  In  a  square  mile 
there  are  640  acres,  and  therefore  15,488,000  tons  of  shale. 
There  are  2,500  square  miles  of  shale  in  Colorado,  or  38,720,- 
000,000  tons.  Assume  that  only  one-half  is  available  and  there 
remains  19,360,000,000  tons  available  shale.  This  is  figured 
for  one  10-foot  seam  only.  A  conservative  estimate  is  30  feet 
of  workable  shale,  or  a  total  of  58,080,000,000  tons  of  available 
shale.  A  fair  average  production  is  a  barrel  of  oil  to  a  ton  of 
shale,  or  58,080,000,000  barrels  of  oil  available.  If  100  plants 
were  in  operation,  each  treating  2,000  tons  daily,  they  would 
have  a  daily  production  of  200,000  barrels.  To  treat  this 
amount  of  shale  would  require  290,400  days,  or  800  years 
approximately.  These  figures  apply  only  to  Colorado;  they 
omit  shale  deposits  elsewhere,  and  are  given  only  to  make  vivid 
and  emphatic  the  statement  that  there  are  mountains  of  shale 
in  Colorado. 

The  Heat  Value  of  Gas  Produced 

One  ton  of  shale  will  produce  on  the  average  2,500  cubic 
feet  of  gas  of  a  calorific  value  of  507  B.  t.  u.  Five  hundred  and 


620         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

seven  by  2,500  gives  1,267,500  B.  t.  u.  as  the  calorific  value  of 
the  gas  produced  from  one  ton  of  shale.  Colorado  coals  give  an 
average  of  about  10,800  B.  t.  u.;  2,000  by  10,800  gives  21,600,- 
000  B.  t.  u.  to  the  ton  of  coal,  or  approximately  17  times  that 
of  the  B.  t.  u.  in  a  ton  of  shale.  In  practice  coal  is  only  about 
60  per  cent,  efficient,  but  gas  is  80  per  cent,  efficient  ;  hence  the 
heat  value  of  the  coal  is  reduced  to  13  times  the  heat  value  of 
the  gas  from  a  ton  of  shale.  In  other  words,  for  each  13  tons 
of  shale  mined  sufficient  gas  would  be  produced  to  do  the  work 
of  a  ton  of  coal.  Thus,  in  a  400-ton  plant  enough  gas  would 
be  produced  daily  to  be  equivalent  to  more  than  30  tons  of 
coal. 

Nature  of  Oil  Shale 

Oil  shale  virtually  contains  no  oil  as  such.  It  is  a  consoli- 
dated mud  or  clay  deposit  from  which  petroleum  is  obtained 
by  distillation.  In  appearance  the  shale  is  black,  or  brownish- 
black,  but  on  weathered  surfaces  it  is  white  or  gray.  It  is 
usually  fine-grained,  with  some  lime  and  occasionally  sand.  It 
is  tough,  but  in  thin  sections  friable.  When  broken  to  a  fresh 
surface  it  may  give  an  odor  like  petroleum.  Thin  rich  pieces 
may  burn  with  a  sooty  flame.  E.  H.  Cunningham-Craig  defines 
it  as  follows  :  Oil  shale  is  an  argillaceous  or  shaly  deposit  from 
which  petroleum  may  be  obtained  by  distillation  but  not  by 
trituration  or  treatment  by  solvents.  Oil  shale  must  be  care- 
fully distinguished  from  oil  sand.  In  the  oil  sand  the  oil  is 
contained  in  the  sand  as  oil.  When  the  sand  is  penetrated  by 
a  well  the  oil  gushes  out  or  is  pumped  out.  In  the  oil  shale 
there  is  no  oil  as  suchf  but  only  the  uncooked  ingredients  of 
oil.  When  the  shale  is  subjected  to  destructive  distillation  — 
i.  e.,  heated  in  a  closed  vessel  or  "cooked"  —  shale  oil  results  as 
a  manufactured 


Origin  of  Oil  Shale 

Oil  shale  is  one  of  a  long  list  of  natural  deposits  which  result 
from  the  deposition  of  organic  matter  from  plants  or  animals 
of  a  former  geologic  era  —  like  anthracite,  bituminous  and 
brown  coal,  peat,  petroleum  and  asphaltum.  Beds  of  oil  shale 
were  laid  down  in  lagoons,  or  wide  expanses  of  quiet  water. 


THE  OIL  SHALE  INDUSTRY  621 

They  contain  a  large  amount  of  organic  matter — low  plant 
forms  of  life  like  algae;  also  pollen,  fish  scales,  insects  and 
remains  of  animal  and  vegetable  life. 

Development  Work  in  the  Oil  Shales 

At  the  present  time  we  have  no  exact  knowledge  of  the 
change  or  the  persistency  of  oil  values  with  depth,  nor  the 
underground  difficulties  to  be  met  in  mining.  Up  to  the  pres- 
ent time  sampling  has  been  done  on  weathered  outcrops  or 
from  shale  close  to  the  surface.  There  is  reason  to  expect 
that  as  unaltered  shale  is  reached  it  will  be  found  to  be  richer 
than  shale  near  the  surface.  Dean  E.  Winchester  reports  that 
one  sample  taken  after  the  weathered  surface  was  removed 
gave  32  gallons  of  oil  a  ton.  A  foot  and  a  half  was  then 
removed  by  blasting.  A  sample  then  gave  55  gallons  a  ton. 
At  Elko,  Nevada,  the  shale  has  been  mined  for  370  feet  from 
the  outcrop  and  no  decrease  has  been  noticed  in  the  richness  of 
the  shale. 

Mining  Oil  Shale 

The  shale  beds  of  Scotland  are  irregular  and  lie  in  syniclinal 
troughs;  they  pinch  out  or  expand;  they  have  a  dip  of  from 
30  to  60  degrees ;  they  are  folded  or  faulted  to  a  great  extent 
and  often  altered  by  intrusive  volcanic  rocks.  All  mining  is 
through  shafts,  some  of  which  are  very  deep.  In  the  United 
States,  however,  the  oil  shale  beds  are  regular;  they  are  vir- 
tually level;  the  greatest  dip  noticed  is  only  25  degrees;  few 
faults  have  thus  far  been  noted,  and  there  is  little  likelihood, 
to  judge  from  the  outcrops  and  the  formation,  that  many  will 
be  found;  the  level  position  of  the  oil  shale  enables  it  to  be 
mined  by  the  ordinary  methods  of  room  and  pillar  coal  mining. 
From  the  standpoint  of  cheap  mining,  if  comparison  is  made 
with  Scotland,  the  advantage  is  certainly  with  the  United 
States. 

Possibilities  of  the  Shale  Industry 

Inasmuch  as  the  oil  shale  industry  has  been  in  operation  in 
Scotland  since  1850 — sixty-nine  years — and  has  met  and  over- 
come technical,  trade  and  economic  obstacles,  it  seems  a  mere 


622         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

matter  of  common  sense  for  the  pioneers  of  the  industry  in 
the  United  States  first  to  follow  the  well-known  and  successful 
methods  of  Scotland ;  to  adapt  these  methods  to  United  States 
conditions,  and  then  to  improve  them  as  fast  as  possible  by 
methods  not  now  known.  Besides  the  production  of  crude  oil, 
gas  and  ammonium  sulphate,  other  possibilities  may  open — 
e.  g.,  the  nitrogen  may  be  reclaimed  in  a  form  for  use  in  the 
manufacture  of  munitions  of  war;  aniline  dyes  and  flotation 
oils  may  be  obtained;  possibly  producer  gas,  a  substitute  for 
rubber,  and  other  products  may  become  valuable.  The  nitro- 
gen content  is  especially  valuable,  as  each  percentage  of  nitro- 
gen will  yield  theoretically  93  pounds  of  ammonium  sulphate 
now  worth  7.3  cents  a  pound.  All  in  all,  it  should  be  realized 
that  the  oil  shale  industry  presents  a  long  series  of  interest- 
Ing  technical-chemical  problems  to  be  solved  by  scientifically 
trained  men.  So  true  is  this  that  the  industry  can  be  classed 
as  a  combined  mining-chemical-manufacturing  project. 

In  some  quarters  there  exist  two  erroneous  ideas,  viz,  that 
the  distillation  of  oil  from  shale  is  a  simple  process  and  that  a 
treatment  once  devised  will  apply  to  all  oil  shales.  To  be  sure, 
in  a  laboratory  retort  a  few  pounds  of  shale  can  be  heated  and 
,-a  small  amount  of  oil  produced.  So  can  water  be  boiled  in  a 
tea  kettle,  but  there  is  as  much  difference  between  this  puny 
outfit  and  the  great  plants  of  Scotland  as  there  is  between  the 
tea  kettle  and  a  great  central  power  plant.  Also  shales  vary 
to  such  an  extent  that  each  deposit  should  be  tested  in  a  care- 
•Jul,  scientific  manner,  just  as  large  bodies  of  low-grade  copper 
ore  are  tested  and  suitable  treatment  plants  erected.  As  in 
handling  low-grade  ores,  the  large  profits  from  oil  shale  will  be 
made  by  handling  a  great  tonnage  at  a  low  cost  to  the  ton. 

Location  of  Oil  Shale  Claims 

The  statute  of  1897  says :  "Any  person  authorized  to  enter 
lands  under  the  mining  laws  of  the  United  States  may  enter 
and  obtain  patent  to  lands  containing  petroleum  or  other 
mineral  oils,  and  chiefly  valuable  therefor,  under  the  provisions 
of  the  laws  relating  to  placer  mineral  claims." 

The  location  of  oil  lands  as  placers  was  general  until  1896, 
when  the  Secretary  of  the  Interior  ruled  adversely.  Thereupon 
Congress  in  1897  passed  a  law  re-establishing  the  former  prac- 


THE  OIL  SHALE  INDUSTRY  62£ 

tice.  The  higher  courts  as  yet  have  had  no  opportunity  to 
pass  upon  the  validity  of  title  to  oil  shale  land  located  under 
the  placer  law. 

The  well-known  case  of  Webb  vs.  The  American  Asphaltum 
Company  furnishes  the  nearest  parallel  case.  In  the  Circuit 
Court  of  Appeals,  Eighth  District,  it  was  held  that  asphaltum, 
when  it  is  in  solid  form  and  is  found  as  a  vein  or  lode,  should 
be  located  as  a  lode.  At  the  present  time  no  court  decision  has 
been  rendered  which  involves  specifically  the  point  as  to  how 
oil  shale  lands  shall  be  located — that  is,  whether  as  lode  or  as 
placer.  It  would  seem,  however,  that  from  the  peculiar  forma- 
tion of  oil  shale  deposits  they  should  be  located  as  placers.  As 
generally  found  these  deposits  are  virtually  horizontal  and  can- 
not be  said  to  have  apexes  within  the  sense  that  miners  and 
the  Mining  Act  of  1872  contemplate.  Neither  can  horizontal 
oil  shales,  as  found  in  the  United  States,  be  said  to  be  in  place 
in  the  sense  that  we  find  deposits  of  other  valuable  minerals 
in  place  when  found  in  lode,  vein  or  ledge  formation.  The 
shale  deposits  cannot  even  be  said  to  have  a  clearly  defined 
hanging  wall,  such  as  is  contemplated  by  the  statute,  since 
they  are  not  covered  by  a  non-mineral  bearing  country  rock 
as  the  miner  is  accustomed  to  find  as  constituting  his  over- 
hanging wall,  but  he  finds  merely  an  earthy  deposit  such  as  is 
generally  found  in  the  ordinary  gold  placer. 

Leasing  Oil  Shale  Land 

An  oil  leasing  bill  of  the  last  Congress  was  killed  in  the  final 
hours  of  the  session.  Another  bill  is  expected  to  pass  the 
present  Congress.  The  general  features  are  likely  to  be  these : 
The  Secretary  of  the  Interior  will  be  given  authority  to  lease 
an  oil  shale  deposit  belonging  to  the  Government  and  as  much 
of  the  surface  as  is  needed  for  operation ;  leases  shall  be  limited 
to  5,120  acres  and  may  be  indefinite  as  to  length;  a  royalty 
of  50  cents  an  acre  must  be  paid ;  the  Secretary  of  the  Interior 
may  waive  the  payment  of  royalty  for  the  first  five  years ;  an 
exchange  of  land  taken  under  a  placer  location  may  be  made 
for  leased  land  to  an  equal  amount;  claims  valid  at  time  of 
passage  of  act  may  be  patented  under  laws  then  existent,  as 
an  efficient  leasing  bill  will  be  an  encouragement  to  the 
industry. 


624         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

General  Principles  of  Mining  Shale 

In  mining  oil  shale,  steam  shovel  methods  may  be  eliminated 
for  the  present.  Beds  of  shale  amenable  to  such  treatment  are 
far  removed  from  railroads  or  are  on  the  top  of  high  cliffs. 
To  reach  these  beds  expensive  roads  would  have  to  be  con- 
structed and  the  first  cost  of  installation  would  be  excessive. 
In  the  next  place,  the  long-wall  system  of  coal  mining  can  be 
eliminated,  because  under  that  method  the  roof  is  allowed  to 
cave  in  after  mining  and  this  would  destroy  any  beds  of  shale 
lying  above  the  one  being  mined.  The  room-and-pillar  method 
of  coal  mining  will  probably  be  adopted.  In  this  method  of 
mining  adits  are  cut  into  the  beds  of  coal ;  at  intervals  cross- 
cuts are  made  at  right  angles  to  the  adits,  and  from  these 
so-called  rooms  are  turned  off.  Pillars  of  size  necessary  to 
support  the  roof  are  left  along  the  adits,  the  cross-cuts  and 
the  rooms.  A  large  percentage  of  shale  must  be  left,  but  this 
is  inconsequential  on  account  of  the  great  extent  of  the  de- 
posits. It  goes  without  saying  that  to  open  an  oil  shale  deposit 
properly  a  definite  plan  of  development  must  be  outlined, 
mechanical  ventilation  supplied,  provision  made  for  rapid  and 
economical  haulage,  and  the  numerous  appliances  provided  for 
handling  a  very  large  tonnage  in  an  efficient  and  economical 
way.  The  open  cut  method  may  be  used  in  some  favorable 
localities. 


Value  of  Oil  Shale  Land 

At  the  present  time  virtually  all  available  shale  deposits  on 
Government  land  have  been  filed  upon  as  "placer."  They  are 
generally  taken  up  in  "association"  claims — i.  e.,  in  eight  20- 
acre  contiguous  tracts  by  eight  locators.  Each  locator  has  a 
one-eighth  undivided  interest  in  the  160  acres.  Annual  assess- 
ment work  to  the  extent  of  $100  must  be  done  on  the  tract  to 
hold  the  title.  The  intrinsic  value  of  a  particular  tract  may  be 
much  or  little.  If  it  is  situated  far  from  a  railroad,  beyond 
even  a  wagon  road,  and  without  water,  it  is  virtually  without 
present  market  value.  If  it  is  accessible,  near  to  transporta- 
tion, with  an  available  water  supply,  with  natural  benches  for 
retorts  and  ample  dumping  ground,  and  the  rich  shale  beds  are 
thick  and  easy  to  get  at,  then  the  land  may  have  a  present 


THE  OIL  SHALE  INDUSTRY  625 

value  of  from  $25  to  $50  an  acre  and  a  prospective  value  in  the 
hundreds  of  dollars  an  acre. 


Phases  of  the  Industry 

The  oil  shale  industry  has  a  variety  of  phases  and  is  con- 
sequently a  complex  industry.  The  mining  of  shale  will  prob- 
ably present  no  problems  of  a  troublesome  character.  The 
crux  of  the  industry  is,  however,  in  the  restoring — i.  e.,  in  the 
conversion  of  the  shale  into  oil  and  gas.  The  specific  problem 
is  to  apply  heat  to  the  retort  at  such  a  temperature  and  with 
such  uniformity  that  not  only  will  the  maximum  yield  be 
produced,  but  that  the  oil  will  be  of  a  suitable  character  for 
the  succeeding  process  of  refining.  On  this  problem  American 
ingenuity  is  at  work.  Already  about  20  processes  are  in 
a  state  of  development,  but  the  Wallace  process,  at  East 
St.  Louis,  111.,  is  probably  the  nearest  to  a  complete  commercial 
basis.  The  refining  of  oil  is  a  well-established  industry,  but 
experiments  with  the  Wells  process  of  refining  have  given 
satisfactory  results  upon  crude  shale  oil.  The  marketing  of 
the  crude  oil  or  its  products — gasoline,  kerosene,  lubricating 
oil,  wax  and  ammonium  sulphate — is  an  economic  problem  that 
must  be  met  in  the  future. 


Estimated  Cost  of  Distillation  and  Refining  Plants 

The  cost  of  a  distillation  plant  with  all  accessories  of  a 
capacity  of  100  tons  of  shale  a  day  is  estimated  at  from  $65,000 
to  $100,000,  according  to  local  conditions.  If  proper  plans  were 
made  in  advance  for  enlargement,  additional  units  could  be 
erected  at  about  one-half  the  cost  of  the  original  unit.  The 
cost  of  a  Wells  refining  plant  ivith  a  daily  capacity  of  400  bar- 
rels, to  include  a  sulphate  of  ammonium  and  gasoline  absorp- 
tion plant,  would  be  from  $300,000  to  $350,000,  according  to 
local  conditions. 


Estimated  Cost  of  Mining  and  Retorting 

The  following  estimate  of  the  cost  of  producing  crude  shale 
oil  without  refining  is  based  on  a  plant  of  400  tons  daily 
capacity : 


626         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Cost  per  ton. 

Mining  $1.25 

Breaking  or  coarse  crushing 10 

Retorting    35 

Loading  and  shipping 05 

Amortization,  interest  and  overhead   expenses 10 

$1.85 

These  costs  for  mining  and  retorting  are  estimated  on  the 
basis  of  42  gallons  to  the  ton  of  shale,  but  there  are  several 
available  workable  strata  in  the  Parachute  Valley,  Colorado, 
that  will  produce  from  50  to  100  per  cent.  more.  Consequently, 
in  practice  these  costs  per  barrel  of  crude  oil  produced  may  be 
considerably  reduced. 


Estimated  Cost  of  Mining,  Retorting  and  Refining 

The  following  estimate  of  the  mining,  retorting  and  refining 
is  also  based  upon  oil  shale  producing  a  barrel  of  shale  oil  (42 
gallons)  to  the  ton  of  shale  in  a  plant  treating  400  tons  a  day: 

Cost  per  ton. 

Mining    $1.25 

Breaking  or  coarse  crushing 10 

Retorting   35 

Refining  by  the  Wells  process 42 

Piping,  loading  and  shipping 10 

Amortization   of   plant  equipment 05 

Interest  on   investment 05 

Overhead   expenses 25 

$2.57 

Products  and  Their  Value 

A  refinery  will  produce  from  crude  shale  oil  approximately 
as  follows: 

Gasoline    25  per  cent. 

Lubricating 60  per  cent. 

Paraffme  wax 2  per  cent. 

Kerosene  or  fuel  oil 3  per  cent. 

Asphaltic  residue 7  per  cent. 

Loss   3  per  cent. 

(Not  including  the  products  of  the  gasoline  absorption  plant.) 


THE  OIL  SHALE  INDUSTRY  627 

In  addition  to  these  products,  there  will  be  the  ammonium 
sulphate  ranging  from  20  to  30  pounds  to  the  ton  of  shale, 
and  about  2,500  cubic  feet  of  gas,  from  which  can  be  extracted 
from  two  to  three  gallons  of  gasoline  per  1,000  cubic  feet  of 
gas,  with  sufficient  high-grade  hydrogen  gas  left  over  for  all 
fuel  requirements  in  operation  of  the  retort  and  refinery  plants. 
These  products  and  average  percentages  in  gallons  and  pounds 
per  barrel  and  probable  wholesale  prices  are  as  follows: 

Main  Products: 

Gasoline,  25%— 10  gallons  at  18c $1.80 

5  gallons  reclaimed  from  gas  at  18c 90 

$2.70 

Lubricating  oil,  60% — 25  gallons  at  30c 7.50 

Other  Products:  $10.20 

Paraffine  wax— (145  M.  P.)  6  Ibs.  at  15c $  .90 

Asphaltic  residue— (rubber  filler)  20  Ibs.  at  5c. .     1.00 
Ammonium  sulphate — 20  Ibs.  at  4c 80 

2.70 


$12.90 

The  average  price  of  crude  petroleum  as  paid  by  the  pipe 
lines,  at  the  wells,  is  as  follows: 

Mexican  crude  (at  Texas  points) $  .99  to  $1.00  bbl. 

Gulf  Coast  points 98  bbl. 

Wyoming  1.53  bbl. 

Northern  Louisiana 1.69  bbl. 

Oklahoma-Kansas    1.72  bbl. 

Northern  Texas 2.13  bbl. 

Eastern  States 2.61  bbl. 

With  the  liberal  estimate  of  $1.85  a  barrel  for  producing 
crude  shale  oil,  with  the  supply  of  well  petroleum  diminishing 
and  the  price  advancing,  with  the  Wallace  plant  about  to  pro- 
duce shale  oil  on  a  commercial  scale,  and  with  other  plants 
under  contract,  it  seems  fair  to  assume  that  shale  oil  will  at 
once  come  into  competition  with  well  petroleum. 

Significant  Features 

Oil  shale  land  is  primarily  acquired  from  the  Government 
under  the  Federal  mining  laws  governing  placer  mining  claims. 


628         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

At  the  present  time,  however,  all  shale  land  advantageously 
situated  has  been  filed  on  and  is  owned  by  individuals  or  cor- 
porations. 

Oil  shale  itself  varies  greatly  in  different  localities  and  in 
different  strata  in  the  same  locality. 

The  oil  shale  industry  is  a  comprehensive  one  and  embraces 
features  of  mining,  shale  reduction,  mechanical  engineering, 
oil  refining,  applied  chemistry,  and  the  business  involved  in 
marketing  the  products. 

Little  manual  labor  is  required,  as  automatic  machinery  does 
the  bulk  of  the  work. 

Variation  in  the  estimated  cost  of  producing  crude  shale  oil 
is  caused  by  the  exclusion  or  inclusion,  in  the  estimate,  of  the 
by-products  in  the  retorting,  like  ammonium  sulphate.  Another 
cause  of  difference  is  the  high  or  low  estimate  of  the  amount 
of  shale  oil  that  can  be  extracted  from  each  ton  of  shale. 

The  early  success  of  the  industry  will  depend  upon  the  cost 
of  production  and  marketability  of  its  main  products — not  upon 
its  by-products — -no  matter  how  fascinating  these  by-products 
may  now  appear. 

Black  powder  is  probably  more  efficient  in  mining  shale  than 
dynamite. 

Some  shales  contain  sulphur  and  hence  produce  an  inferior 
grade  of  oil,  but  the  United  States  shales  are  free  from  sul- 
phur and  produce  a  high  grade  of  crude  oil  easily  amenable  to 
refining. 

Gasoline  from  United  States  oil  shale  does  not  become  dark, 
off  color,  or  otherwise  deteriorated  by  standing.  Samples 
refined  by  the  Wells  process  are  known  to  have  kept  their  color 
for  more  than  a  year. 

Crude  shale  oil  is  a  manufactured  oil  and  consequently  can 
be  kept  virtually  free  from  impurities.  Tests  thus  far  made 
indicate  that  the  great  majority  of  shale  oils  produced,  and  all 
those  made  from  United  States  shale,  when  made  under  proper 
conditions,  are  of  a  quality  greatly  superior  to  the  oil  produced 
from  wells.  The  quality  of  oils  produced  from  wells  varies 
considerably.  Impurities  that  prove  injurious  to  the  quality 
of  the  oil  are  present,  to  a  greater  or  less  extent,  in  almost  all 
well  oils.  The  majority  of  shales  do  not  contain  impurities  to 
such  a  degree  as  to  affect  the  quality  of  the  oil  produced. 


THE  OIL  SHALE  INDUSTRY  629 

Kerogen,  the  oil-producing  matter,  and  hydrogen  (present  in 
the  natural  state  of  the  shale  and  added  in  the  process  of  dis- 
tillation) are,  as  a  rule,  the  only  constituents  which  form  the 
oil.  These  constituents  make  a  virtually  perfect  oil. 

The  oil  produced  from  4.44  tons  of  shale  (42  gallons  to  the 
ton)  is  equivalent  to  the  heat  effect  of  one  ton  of  coal  of  11,000 
calorific  value. 

The  heat  value  of  2.41  tons  of  oil  shale  (42  gallons  to  a  ton) 
is  equivalent  to  the  heat  value  of  one  ton  of  coal  of  11,000 
calorific  value. 

United  States  massive  shale  will  average  18  cubic  feet  to 
the  ton ;  when  broken,  30  cubic  feet  in  volume  to  the  ton. 

A  ton  of  shale  (42  gallons)  will  produce  2,500  cubic  feet  of 
gas.  A  400-ton  plant  would,  therefore,  produce  daily  800,000 
cubic  feet  of  gas.  Ninety-four  pounds  of  coal  are  equivalent 
to  1,000  cubic  feet  of  gas.  Consequently  the  800,000  cubic 
feet  of  gas  produced  daily  by  a  400-ton  distillation  plant  would 
be  equivalent  to  75,200  pounds  of  coal,  or  37.6  tons. 

The  minimum  capacity  of  distillation  or  retorting  plant  to 
include  crushing,  retorting,  gasoline  absorption  and  ammonium 
sulphate  units,  should  be  100  tons  daily,  provided  the  distilla- 
tion required  not  more  than  six  hours,  or  at  least  four  charges 
made  daily.  The  cost  of  such  a  plant  would  be  approximately 
$100,000.  Additional  100-ton  units  could  be  installed  for 
$50,000  each.  These  estimates  ^are  made  for  retorts  which 
have  a  capacity  of  1.5  tons  to  the  charge.  From  five  to  six 
charges  can  be  made  daily,  resulting  in-  a  daily  capacity  of 
from  7.5  to  9  tons  a  day.  A  bank  of  16  retorts  would  have  a 
theoretical  capacity  of  from  120  to  144  tons  a  day.  However, 
in  order  to  allow  for  accidents  and  delays,  a  bank  of  16  retorts 
is  roughly  assumed  to  be  of  100  tons  daily  capacity.  A  100-ton 
plant  should  be  regarded  as  only  a  starter.  Four  hundred 
tons  should  be  regarded  as  a  minimum  size  for  continuous 
commercial  operation. 

The  minimum  size  for  a  refinery,  to  include  a  paraffine  wax 
plant,  should  be  400  barrels  daily,  and  would  cost  approxi- 
mately $350,000.  This  also  should  be  regarded  as  only  a 
starter.  A- refinery  of  1,000  barrels  daily  capacity  should  be 
regarded  as  the  minimum  daily  capacity  for  continuous  com- 
mercial operations. 


630         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

At  Tulsa,  Okla.,  the  cost  of  refining  is  38  cents  a  barrel  in 
the  Cosden  &  Co.  plant  of  40,000  barrels  daily  capacity.  In  a 
two  months'  test  run  by  the  Wells  process  at  this  plant  the 
cost  was  27  cents  a  barrel. 

A  plot  of  ground  200  by  300  feet  is  sufficient  for  a  distilla- 
tion plant  of  400  tons  daily  capacity. 

Only  about  60  cent,  of  the  gas  produced  would  be  needed 
to  supply  power  for  the  distillation  and  refinery  plants.  The 
remainder,  40  per  cent.,  would  be  available  for  other  purposes. 

Kerogen — the  oil-producing  ingredient  in  oil  shale — contains 
plenty  of  carbon,  but  little  hydrogen.  The  introduction  of 
steam  in  the  distillation  process  supplies  the  hydrogen  neces- 
sary. On  most  shales,  tests  with  and  without  steam  have 
shown  a  greater  production  of  oil  with  the  use  of  steam  than 
without  it,  and  a  greatly  superior  quality  of  crude  oil. 

Ore  is  crushed,  but  shale  should  be  broken.  This  is  accom- 
plished in  Scotland  by  the  use  of  spiked  rolls.  Spikes  2.5  inches 
at  the  base  and  3  inches  long  are  arranged  spirally  in  rolls 
and  are  removable.  In  Scotland  all  shale  smaller  than  one 
inch  is  left  at  the  mine. 

Sticking  of  shale  in  the  retort,  in  some  cases,  causes  serious 
trouble.  Tests  show  that  if  the  temperature  is  kept  below  850 
degrees,  sticking  does  not  occur  in  Colorado  shales,  but  they 
do  stick  if  the  temperature  goes  above  that  point.  Samples 
of  Nevada  and  Utah  shales  have  been  tried  that  do  not  stick 
up  to  1,200  degrees.  Mixtures  of  Nevada  and  Colorado  shale 
seemingly  do  not  stick.  In  Parachute  Creek  the  black,  rich 
streaks  stick  at  850  degrees,  but  if  mixed  with  poorer  shale 
(35  to  40  gallons  to  the  ton)  in  the  proportion  of  100  pounds 
of  the  poorer  to  400  pounds  of  the  richer,  the  product  does  not 
stick  below  1,000  degrees.  However,  sticking  is  prevented  by 
the  introduction  of  steam,  provided  the  steam  is  injected  early 
enough  in  the  process. 

Crude  petroleum  from  wells  varies  widely  in  different  fields. 
Crude  shale  oil  is  virtually  a  manufactured  article.  It  may  be 
spoiled,  in  the  manufacture,  for  refining  into  valuable  products. 
Also,  good  shale  oil  may  be  subjected  to  an  inefficient  method 
of  refining  and  become  commercially  unprofitable. 


THE  OIL  SHALE  INDUSTRY  631 

In  Scotland  two  men  working  together  produce  8  tons  (2,240 
pounds)  a  day  at  a  cost  of  5  shillings,  or  $1.25  a  ton.  Reduced 
to  a  ton  of  2,000  pounds  this  would  be  $1.11  a  ton.  The  Scotch 
miner  works  on  a  seam  only  6  or  7  feet  thick,  hundreds  of  feet 
below  the  surface,  under  unfavorable  conditions.  If  the  Scotch 
miner,  under  unfavorable  conditions,  can  mine  4  tons  of  shale, 
certainly  the  American  miner,  in  our  shale  beds  so  easily 
worked,  can  produce  twice  that  amount.  It  is  certain,  then, 
that  our  estimate  of  $1.25  a  ton  for  mining  is  large  enough 
and  in  practice  will  surely  be  reduced. 

The  quantity  and  quality  of  oil  that  can  be  produced  are 
variable,  according  to  the  skill  and  intelligence  of  the  operator, 
the  method  used,  the  type  of  retort,  the  rate  of  heating,  the 
amount  of  heat  applied,  the  introduction  of  steam,  and  many 
other  details.  In  short,  oil  produced  from  shale  may  or  may 
not  show  good  results,  from  no  fault  of  the  shale.  Good  shale, 
subjected  to  poor  methods,  may  give  oil  that  fails  to  yield  to 
refining.  Hence  follow  conflicting  opinions  as  to  the  character 
of  the  shale  oil  produced  and  the  results  from  refining.  Re- 
torting shale  and  refining  oil  are  not  "foolproof"  processes. 

A  frequent  distinction  is  made  between  American  and  Scot- 
tish shale,  as  if  there  were  only  two  varieties — one  American 
and  one  Scotch.  It  should  be  clearly  understood  that  there  is 
a  great  variety  of  American  shales — as  great  a  difference 
between  them  as  between  any  one  and  the  Scotch  shale.  Hence 
even  varieties  of  American  shale  may  require  different  forms 
of  treatment. 

In  Colorado  alone  the  available  oil  from  shale  is  conserva- 
tively estimated  at  58,080,000,000  barrels.  To  produce  this 
would  require  the  work  of  100  plants  each  producing  2,000  bar- 
rels daily  for  800  years. 

SUMMARY 

1.  The  oil  shale  industry  has  reached  its  greatest  develop- 
ment in  Scotland,  where  it  was  established  in  1850.    Next  in 
importance  comes  France  and  then  New  South  Wales. 

2.  In  Scotland  the  technical  and  chemical  problems  of  the 


632         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

industry  have  been  carefully  solved  and,  on  the  whole,  the 
industry  has  been  commercially  profitable. 

3.  The  Scotch  shale  beds  are  comparatively  thin,  irregular, 
steeply  inclined,  deep  and  expensive  to  work. 

4.  The  oil  content  of  the  Scotch  shales  is  now  much  less 
than  formerly,  and  the  shale  could  not  be  worked  profitably  if 
it  were  not  for  the  ammonium  sulphate  produced  as  a  by- 
product. 

5.  The  increased  demand  for  petroleum,  the  exhaustion  of 
producing  wells  in  the  near  future,  and  the  enhanced  price  will 
result  in  competitive  shale  oil,  produced  from  an  inexhaustible 
supply  of  shale  by  cheap  mining,  efficient  retorting  and  dis- 
tillation. 

6.  The  oil  shale  industry  is  not,  in  ordinary  parlance,  "a 
poor  man's  game."    The  technical  and  chemical  problems  are 
numerous  and  require  a  high  grade  of  scientific  ability  for 
their  solution. 

7.  A  plant  of  400  tons  daily  capacity  is  as  small  as  can  be 
operated  permanently  and  successfully,  as  the  profits  will  de- 
pend chiefly  on  the  large  tonnage  handled.    In  this  respect  the 
oil  shale  industry  bears  the  same  relation  to  oil  that  Utah 
Copper  and  the  other  copper  porphyries  bear  to  copper. 

8.  An  investment  of  $500,000  is  as  small  as  can  be  safely 
counted  upon  to  make  a  single  project  successful. 

9.  Labor  is  cheaper  in  Scotland  than  in  the  United  States; 
the  Scotch  shale  produces  more  ammonium  sulphate  than  the 
American  shale.    These  are  the  only  factors  favorable  to  the 
Scotch  shale;  all  other  elements  that  enter  are  distinctly  in 
favor  of  the  United  States  shale. 

10.  The  favorable  features  in  the  oil  shale  industry  in  the 
United  States  are : 

(a)  The  enormous  extent  of  the  deposits. 

(b)  The  great  thickness  both  of  the  medium  and  high-grade 
shale. 

(c)  The  horizontal  position  of  the  strata  and  their  height 
above  the  level  of  the  creeks — a  combination  that  affords  cheap 
mining. 

(d)  Adequate  water  supply  for  the  condensing  and  cooling 
systems  of  both  the  distilling  and  refining  plants. 


THE  OIL  SHALE  INDUSTRY  633 

(e)  Accessibility  and  nearness  to  railroads  and  markets. 

(f )  The  great  richness  of  the  shale. 

These  features  combine  to  make  the  oil  shale  deposits  of  the 
United  States  the  most  valuable  deposits  of  their  kind  in  the 
world. 

In  the  minds  of  those  men  who  are  best  informed  on  the 
technical  and  business  phases  of  the  oil  shale  industry,  it  has 
passed  the  experimental  stage  and  "has  arrived." 


634         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS 
PROPOSITION? 

An  Address  Before  the  American  Mining  Congress  at  St.  Louis,  Mo., 
November  20,  1919,  by  J.  B.  JONES,  of  Kansas  City,  Mo. 

Knowing  that  we  are  here  to  discuss  a  new  industry,  and 
knowing  that  we  have  gathered  here  much  of  the  best  brains 
of  the  engineering  world  of  the  United  States,  it  is  somewhat 
with  trepidation  that  I  address  you. 

As  my  work  has  been  more  along  the  lines  of  business 
research,  of  finding  out  whether,  in  the  opinion  of  my  asso- 
ciates and  myself,  the  industry  would  warrant  the  invest- 
ment of  capital,  and  would  warrant,  at  the  present  time, 
entering  into  the  building  and  construction  of  works  of  suffi- 
cient size  to  put  it  upon  a  firm  industrial  basis;  I  trust  you 
will  bear  with  me  if  I  talk  to  you  not  in  the  technical  terms  of 
the  mining  engineer  and  the  scientist,  but  give  you  the  plain 
facts  that  confront  the  average  business  man. 

Some  years  ago  it  was  my  privielge,  in  doing  some  investi- 
gating work — I  think  it  was  about  1914  or  1915 — to  go  into 
the  western  slope  of  Colorado,  in  Garfield  and  Rio  Blanco 
Counties,  investigating  a  substance  then  called  "bituminite," 
not  termed  by  our  Bureau  of  Mines  in  a  generic  term,  but 
afterwards  designated  as  oil  shales. 

Unlimited  Supply 

The  Lackawanna  Steel  Company  requested  me  to  go  out  and 
find  out  if  this  product  existed,  and,  after  some  weeks  of 
research,  I  reported  back  that  the  tonnage  was  practically 
unlimited,  and  that  nearly  all  the  creeks  to  the  south  and 
southeast  of  the  Book  Cliffs  cut  through  practically  solid  sedi- 
mentary shales  of  a  nature  very  different  from  the  shales  we 
had  in  the  Eastern  States,  and  very  different  from  the  shales 
overlying  the  cannel  coals  in  Virginia  and  Kentucky,  and  in 
consistency  and  chemical  qualities  were  different  from  any- 
thing that  had  come  under  my  observation. 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  ?  635 

Their  object  was  to  find  a  substitute  for  wooden  railway 
ties — they  desired  to  find  some  material  which  was  sufficiently 
tough,  resilient,  and  not  fragile,  and  it  seemed  this  material 
might  be  suitable.  I  had,  for  years,  been  interested  as  a 
practical  oil  producer  of  petroleum  oils,  and  associated  with 
men  interested  in  the  producing  of  oil  from  wells,  and  in 
refining  petroleums  and  distributing  them. 

At  that  time  I  could  see  very  little  practical  use  for  those 
enormous  deposits,  but  owing  to  the  research  work  in  the  State 
of  Colorado  by  the  Colorado  School  of  Mines  and  the  United 
States  Geological  Survey,  it  became  apparent  that  nature  had 
deposited  those  enormous  cliffs  for  the  use  of  man  in  some 
specific  way. 

It  seemed  we  had  there  a  storehouse  of  unlimited  raw  ma- 
terial for  the  production  of  oils  which  were  not  exactly  the 
same  as  petroleum  oils,  but  which  were  a  substitute  for  them 
when  properly  manufactured  and  prepared.  They  were  suffi- 
ciently interesting,  so  that  a  group  of  us  took  up  research  work 
in  connection  with  them;  first,  in  quarrying  and  reducing,  in 
a  crude  way,  the  shales  from  beds  in  nine  different  states. 

Shales  in  Five  States 

We  went  into  Colorado,  Wyoming,  Utah,  Montana  and 
California,  especially,  and  after  finding  that  there  were  enor- 
mous deposits  we  began  to  eliminate  them  down  to  the  point 
where  they  were  commercially  accessible  and  workable. 

There  is,  as  Dr.  Alderson  has  said,  almost  unlimited  material, 
but  much  of  it  is  so  remote  from  transportation  and  so  situated 
with  reference  to  being  accessible  to  railroads  and  water  supply 
as  to  be  only  available  for  future  generations.  But  there  are 
located  along  our  great  trans-continental  railroads  enormous 
beds  of  it  sufficient  to  supply  all  the  mills  and  reduction  works 
which  will  be  built  during  the  coming  generation,  and  will  be 
able  to  supplement  and  in  a  large  measure  supplant,  in  years 
to  come,  our  fast  waning  petroleum  production. 

Even  in  my  brief  history  I  have  seen  the  rise  and  fall  of  vast 
potential  fields  of  petroleum  production.  I  have  seen  the  rapid 
decline  and  almost  reckless  wasting  of  our  natural  gas  fields 
and  our  petroleum  fields  of  the  East.  We  are  a  reckless  nation, 
squandering  the  potential  assets  which  are  put  in  our  care. 


636         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

We  have  dissipated  into  the  atmosphere  hundreds  of  thousands 
of  billions  of  cubic  feet  of  the  most  precious  fuel  God  ever 
gave  to  man,  in  the  way  of  natural  gas,  which,  had  it  been 
conserved  properly,  would  today  be  lighting  and  heating  our 
cities  through  all  this  Eastern  country. 

We  are  facing  a  critical  situation  in  regard  to  our  fuel  and 
our  transportation,  and  owing  to  the  rapid  development  of  the 
internal  combustion  engine  and  the  enormous  development  of 
American  enterprises  everywhere,  we  have  ruthlessly  slaugh- 
tered our  petroleum  fields,  and  today  we  are  facing  an  acute 
shortage.  The  wheels  of  industry,  of  commerce,  of  railroads, 
of  individual  and  private  enterprises  and  locomotion  would 
stagnate  and  all  the  business  supremacy  of  the  United  States 
of  America  will  wane  when  we  have  not  sufficient  petroleum  to 
supply  our  needs. 

Supply  World 

Dr.  Alderson  has  told  you  how  the  State  of  Colorado,  with 
one  10-foot  vein,  would  supply  100  plants  running  2,000  tons  a 
day  for  800  years.  As  enormous  as  those  figures  seem,  they 
are  but  small  as  compared  with  the  demand.  That  would  only 
be  200,000  tons  a  day,  and  our  richest  shales  will  barely  pro- 
duce one  barrel  and  a  half  to  the  ton;  even  now  our  engineers 
are  figuring  on  one  barrel  to  the  ton,  and  that  would  be  200,000 
barrels  a  day,  and  200,000  barrels  is  but  a  pittance  in  the 
maelstrom  of  the  world's  demand. 

We  are  producing  in  the  United  States  today  practically 
1,000,000  barrels  a  day  of  high-grade  petroleum,  and  we  are 
running  behind  from  20  to  50  million  barrels  a  year,  notwith- 
standing we  are  importing  50,000,000  barrels  from  Mexico  in 
the  way  of  fuel  oil.  If  our  coal  shortage  continues,  and  we 
all  know  we  will  never  face  an  era  of  cheap  coal  again,  there  is 
no  possibility  of  petroleum  oil  ever  again  reaching  the  slaugh- 
ter price  of  15  cents  a  barrel,  as  it  was  20  years  ago  in  Western 
Ohio  and  Indiana. 

Now,  I  only  bring  these  facts  out  to  centralize  your  minds 
on  the  things  that  the  business  man  needs  to  know.  First, 
is  the  article  in  demand;  second,  can  it  be  produced  in  com- 
petition with  its  competitive  articles;  and,  third,  is  there  an 
unlimited  market  for  it  ? 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  ?  637 

No  business  man  questions  the  tremendous  and  pressing 
demand  for  oils,  and  no  sane,  well-informed  engineer  is  unaware 
that  we  are  speeding  up  with  cyclonic  force  and  the  whole 
United  States  is  in  a  fever  of  speculative  excitement  attempt- 
ing to  increase  our  petroleum  supplies. 

The  Doctor's  figures  are  slightly  too  conservative  as  to 
prices.  The  market  at  the  wells  today,  November  17,  for  high- 
grade  petroleum  in  Pennsylvania,  West  Virginia,  Eastern  Ohio 
and  New  York  State  is  $4.50  a  barrel,  which  is  paid  for  all 
grades  of  Pennsylvania  petroleum.  The  market  for  Kentucky, 
Indiana  and  Ohio  is  around  the  $3  mark  at  the  wells;  and, 
mind  you,  notwithstanding  the  great  speculative  fever,  pros- 
pecting and  wild-cat  drilling,  the  fields  in  Pennsylvania,  West 
Virginia,  Indiana  and  Illinois  are  on  their  last  legs.  Production 
in  Kentucky  is  about  12,000  barrels  a  day  and  it  is  not  likely  to 
increase.  The  production  in  Oklahoma  and  Kansas  has  reached 
its  zenith ;  only  Texas,  Louisiana  and  Wyoming  offer  undrilled 
areas  that  seem  able  to  appreciably  increase  their  production. 

Costs  and  Values 

Now,  these  are  only  basic  facts.  To  get  down  to  the  cost 
and  value  of  the  production  from  shale :  We  quarried  them  in 
nine  States,  we  sent  them  to  many  experimental  laboratories, 
we  tested  out  many  kinds  and  types  of  retorts  for  handling 
them,  and  there  are  many  technical  questions  to  be  considered 
in  those,  but  there  are  a  great  many  engineers  in  the  United 
States  today  perfectly  capable  of  solving  these  problems. 

The  question  of  producing  oil  from  shale  is  not  as  compli- 
cated or  as  technical  as  producing  steel  from  iron  ore,  it  is  not 
as  complicated  as  distilling  many  by-products  from  coals  or 
from  woods  and  the  waste  in  our  forests.  It  is  a  simple, 
straight  manufacturing  proposition,  dependent  largely  upon 
local  conditions  of  transportation,  labor  and  water. 

A  by-product  oven  suitable  for  handling  shales  and  pro- 
ducing crude  oils  can  be  built  and  operated  very  much  cheaper 
and  with  much  less  technical  knowledge  than  can  by-product 
coke  ovens.  Every  engineer  agrees  that  it  is  a  wanton 
waste  of  a  natural  resource  to  coke  coal  in  an  open  beehive 
oven  today,  that  you  are  wasting  and  dissipating  into  the 
atmosphere  one-half  of  the  physical  value  of  the  coal.  The 


638         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

by-product  oven,  or  the  reduction  works  for  shale,  are  de- 
scribed in  so  many  technical  papers  that  I  will  not  attempt  to 
go  into  that,  but  Dr.  Alderson  has  given  you  some  figures  that 
are  very  reliable. 

In  our  research  work,  in  which  we  have  quarried  our  shale, 
we  have  consulted  the  local  engineers  who  are  familiar  with 
mining  problems  of  all  kinds.  We  have  reduced  them,  checked 
the  labor,  the  amount  of  expense,  and  we  think  the  product 
obtained  from  the  shale  can  be  handled  from  the  shale  bed  in 
the  mountain  to  f .  o.  b.  on  cars  to  the  consumer  for  an  expense 
of  $3.50  to  $4  per  ton. 

Now,  he  has  analyzed  that  by  saying  that  he  believes  the 
maximum  expense  of  mining  would  be  $1.25  a  ton,  pre-war 
prices.  That  would  be  very  high,  as  the  State  Geologist  of 
Colorado,  Dr.  George,  states  that  all  the  mines  of  Colorado 
were  able  to  lay  coal  down  at  the  mine  for  a  series  of  three 
years  at  about  73  cents  a  ton.  Mining  shale  should  not  be  more 
expensive  than  coal. 

Shale  will  fracture  and  break  by  drilling  and  blasting  with 
black  powder  quite  readily,  but  the  shale  is  so  resistent,  so 
tough,  so  unyielding  that  it  has  to  be  drilled  and  blasted ;  but 
it  offers  also  admirable  structure  for  standing  up,  the  walls 
will  not  fall  in,  they  will  make  large  roofs.  You  cannot  only 
use  a  tunnel  system,  but,  in  many  cases,  you  can  blast  from  the 
mountainside  in  millions  of  tons,  and  you  can  use  the  glory 
hole  system  where  the  shale  beds  are  from  20  to  50  feet  thick, 
as  they  are  in  many  places  throughout  Colorado.  We  find 
many  stratas  of  our  commercial  shales  run  from  10  to  30  feet 
that  are  uniform  for  many  miles,  and  a  cost  sheet  of  $1.25 
per  ton  for  mining  should  be  very  liberal. 

Most  of  the  processes  will  not  require  fine  crushing  of  the 
shales — those  who  reduce  them  to  a  fine  powder  will  add 
materially  to  the  expense — but  the  cost  of  mining  and  retort- 
ing should  not  exceed  $1.50  to  $1.75  a  ton.  When  at  that 
stage  you  automatically  have  the  crude  oil,  so  the  cost  of  pro- 
ducing crude  oil  from  shale  would  run  from  $1  to  $1.75  per 
ton  of  shale  handled,  and  if  the  shale  produces  one  barrel,  and 
nobody  proposes  to  work  at  shale  of  less  content  for  many 
years,  that  would  be  your  cost  per  barrel.  But  the  average 
through  the  Grand  Valley,  Parachute  and  Debeque  District 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  7639 

(the  shale  to  be  mined  during  this  and  the  coming  generation) 
will  probably  be  $1.25  to  $1.50. 

Producing  By-Products 

There  is  a  feature,  however,  that  the  Doctor  has  not  men- 
tioned, which  enters  very  largely  into  this  computation.  At 
the  same  time  we  are  producing  the  crude  oil,  we  are  pro- 
ducing two  by-products  at  no  cost,  one  is  ammonium  sulphate, 
and  the  nitrogen  content  of  the  shales  will  average,  I  think, 
about  decimal  aught  five  (.05),  or  one-half  of  1  per  cent. 

Now,  in  retorting,  if  retorted  under  the  steam  method,  we 
will  recover  a  large  amount  of  the  ammonium  sulphate.  If 
retorted  under  the  dry  method,  without  the  addition  of  steam, 
we  will  not  recover  so  much,  but  in  no  case  would  it  be  well  to 
attempt  to  recover  the  utlimate  amount  of  ammonium  sul- 
phate, because  the  addition  of  time  and  heat  would  be  too 
expensive  to  warrant  the  additional  expense.  However,  in  our 
normal  process  of  retorting,  we  will  recover  about  one-half  of 
the  ammonium  sulphate. 

By  treating  the  ammonia  water  and  precipitating  the  ammo- 
nium sulphate  in  the  form  of  crystals,  we  will  be  able  to  save 
40  or  50  cents  a  ton  net,  75  or  80  cents  a  ton  gross.  It  will 
probably  cost  30  to  40  cents  to  treat  it,  and,  in  addition  to  that, 
the  vapors  generated  in  the  retort  in  the  form  of  fixed  gas 
carry,  the  same  as  our  oil  well  gases,  a  large  amount  of  the 
very  light  hydrocarbons  in  the  form  of  gasoline,  which  can  be 
recovered  by  absorption  or  compression. 

As  the  shales  will  produce  from  two  to  three  thousand  cubic 
feet  of  gas  per  ton,  these  gases  taken  from  the  condenser  will 
be  passed  through  scrubbers  or  compressors  and  will  be  able 
to  recover  from  four  to  six  gallons  of  gasoline  per  ton  of  shale. 
This  gasoline  would  be  worth,  at  the  works,  at  least  15  cents 
per  gallon,  or  a  minimum  of  60  cents  a  ton,  therefore,  leaving 
the  net  cost  of  the  crude  oil  from  50  to  75  cents  per  barrel. 
Now,  that  should  be  very  reasonably  worked  out  with  the 
modern  processes. 

Beyond  Experimental  Stage 

A  great  many  people  have  said  to  me :  "Well,  where  are  your 
works?"  And,  "This  is  an  experimental  business."  I  do  not 


640         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

consider  anything  in  the  world  today  experimental  that  has 
been  done  on  a  commercial  scale  for  more  than  50  years.  It 
is  perfectly  ridiculous  for  any  business  man  in  America  to  say 
that  American  engineers  and  American  refiners  have  less  abil- 
ity to  meet  conditions  that  exist  than  Scotch  or  German 
engineers  or  refiners.  We  know  that  we  have  the  best  mechan- 
ical, electrical  and  mining  engineers  in  the  world.  That  state- 
ment goes  unchallenged.  Therefore,  we  can  mine  and  reduce 
the  shale.  We  also  know  that  the  United  States  absolutely 
leads  the  world  in  petroleum,  petroleum  refining,  marketing 
and  distributing,  and  our  refineries  have  been  able  to  meet  any 
problem  which  has  come  up  with  any  oil  which  has  been  pro- 
duced. 

We  have  found  that  the  shale  oils,  when  properly  produced 
and  not  broken  up  or  cracked  by  excessive  temperatures  in  the 
retorts,  which  in  that  case  might  reduce  them  to  fuel  oil  or  oils 
which  could  be  cracked  into  gasoline  or  gas  oil  only,  have  a 
physical  value  and  potential  market  value  equal  to  the  high- 
grade  petroleum  oils.  For  instance,  this  simply  represents 
crack  shale  (exhibted  samples)  that  represents  a  layer  of  the 
Parachute  Valley  shales.  We  have  here  a  simple  and  orna- 
mental bed  post  or  stand  leg,  that  is  turned  from  a  layer  of 
shale  similar  to  the  first  specimen,  it  shows  the  close,  fine 
grained  structure,  and  is  almost  equal  to  Circassian  walnut. 
It  is  a  little  heavier  than  wood  and  not  as  heavy  as  some  varie- 
ties of  stone.  It  can  be  made  into  some  very  useful  articles 
and  is  simply  turned  and  polished.  It  can  be  reduced  in  a 
retort,  and  kept  at  proper  temperatures  will  volatilize  all  the 
carbons  and  will  carry  over  a  content  which  condenses  in  the 
form  of  a  crude  oil. 

Refining  Process 

The  shale  oil,  if  retorted  at  a  low  temperature,  will  have  the 
consistency  of  butter  or  lard.  If  carried  over  at  a  high  tem- 
perature, they  are  more  broken  up  and  are  more  liquid.  This 
(exhibited  samples)  when  raised  a  few  degrees  becomes  a 
liquid;  this  is  a  crude  oil  with  the  appearance  of  lard,  only 
dark  in  color.  Passed  through  an  ordinary  refining  process,  we 
get  first  about  19  per  cent,  of  pure  gasoline,  which  is  equal  to 
petroleum  gasoline,  and  which  has  about  the  same  initial  and 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  7641 

the  same  end  point.  In  other  words,  it  will  begin  to  vaporize 
at  80  to  100  degrees,  and  will  all  pass  over  at  450  degrees. 

Following  that  we  will  get  in  refining  from  the  crude  shale 
oil  about  10  per  cent,  of  what  refiners  using  petroleum  oil 
would  call  gas  oil,  used  to  enrich  water  gas  in  our  gas  works, 
and  which  can,  by  being  passed  through  a  cracking  process, 
produce  half  of  its  volume  into  motor  spirits  or  gasoline. 

Adding  the  gas  oil  cut,  we  will  obtain  an  average  of  about 
25  per  cent,  gasoline.  If  we  passed  the  shale  oil  through 
cracking  processes,  we  could  obtain  about  50  per  cent,  of  gaso- 
line, but  our  residue,  after  taking  oft0  the  light  oil,  is  a  very 
superior  lubricating  oil.  It  is  too  long  to  go  into  the  long 
technical  tests,  but  these  have  been  tested  by  many  labora- 
tories and  the  Bureau  of  Standards  in  Washington,  and  their 
record  on  these  oils  for  friction  and  lubricating  qualities  are 
superior  to  the  same  record  oils  made  from  petroleum,  i.  e., 
oils  with  the  same  fire,  flash  and  viscosity  tests.  The  lubri- 
cating oil,  as  it  comes  from  the  still,  without  treatment,  gives 
us  about  60  per  cent,  of  the  crude  oil  into  a  lubricating  stock, 
or  an  oil  suitable  for  all  kinds  of  lubricating  purposes  which 
can  be  finished  according  to  the  market  demands  and  can  be 
treated  for  color,  the  aniline  dyes  taken  out  of  it,  and  in  that 
form  we  get  the  shades  and  colors  of  the  finest  lubricating  oils. 
So  that  the  shale  will  produce  as  beautiful  spindle  oil,  light 
motor  or  heavy  motor  oil  and  greases  equal  to  the  best  petro- 
leum, and,  so  far  as  our  records  show,  superior  to  the  best 
petroleum  oils  for  lubricating  oils. 

Lubricating  Oils 

As  to  the  lubricating  oil,  the  lubricating  stock  would  require 
treating  the  same  as  a  paraffin  base  petroleum  oil,  by  being 
chilled  and  pressed  through  wax  presses.  Then  we  get  from 
the  original  crude  about  3  per  cent,  of  a  very  high-grade 
paraffin  wax.  This  wax  will  find  a  ready  market  in  competi- 
tion with  petroleum  wax,  from  the  fact  that  it  is  a  higher 
melting  point.  The  petroleum  waxes  melt  at  from  112  up  to 
124  degrees ;  they  have  to  be  refined  and  pressed  over  several 
times  to  get  them  above  that.  The  normal  melting  point  of  the 
shale  wax  is  130  to  140,  making  it  a  superior  wax  for  tropical 
work. 


642         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Following  the  paraffin  wax,  which  you  will  have  no  difficulty 
in  marketing,  we  have  from  5  to  8  per  cent,  of  the  asphaltic 
base  or  asphaltic  residue.  The  shale  oils  are  a  combination, 
as  you  see,  and  as  the  refining  proves,  having  both  paraffin  and 
asphaltum  in  them ;  nearly  all  petroleum  oils  do,  but  in  varying 
proportions ;  even  our  Gulf  petroleums  have  a  minute  amount 
of  paraffin,  but  they  are  designated  as  asphaltum  oils,  while 
our  mid-continent  oils  are  designated  as  paraffin  oils. 

The  last  product  of  distillation  will  be  the  asphaltic  residue, 
useful  for  road  making,  artificial  roofing,  paving,  rubber  belt- 
ing and  as  an  adulterant  for  making  automobile  tires.  This 
asphaltic  residue  will  fuse  or  mix  with  rubber,  so  they  can  use 
40  per  cent,  of  this  in  combination  with  rubber  in  making 
automobile  tires. 


Income  Estimated 

While  in  our  estimates  of  income  we  have  estimated  this 
asphalt  at  purely  asphalt  prices,  say,  $12  to  $15  a  ton,  yet  in 
competitive  market  it  will  bring  the  price  of  gilsonite,  which 
is  about  $40  a  ton  f .  o.  b.  cars.  Gilsonite  is  used  very  largely 
by  paint  and  varnish  makers  and  water-proofing  and  lacquer 
works,  and  also  was  used  in  Germany  for  the  extraction  of 
aniline  dyes. 

You  can  start  with  the  by-products  and  go  as  far  as  you  like 
in  the  chemical  research,  but  what  we  have  been  concerned 
with  is  what  we  could  get  out  of  the  oils,  and  if  they  would 
pay.  Taking  this  series  as  they  are  refined,  and  admitting  that 
it  costs  a  little  more  to  refine  them  and  treat  them  than  petro- 
leum oils,  because  of  the  large  amount  of  coloring  matter  in 
them  (it  is  well  known  that  the  average  cost  of  refining 
petroleum  oil  does  not  exceed  1  cent  a  gallon),  and  we  have 
estimated  that  this  might  be  2  cents  a  gallon. 

After  adding  liberal  amounts  for  depreciation  and  amortiza- 
tion, for  crushing  and  retorting,  we  estimate  our  crushing  at 

10  cents  a  ton,  our  retorting  at  40  cents,  our  refining — i.  e. 
a  straight  run  refining — at  1%  cents  a  gallon,  re-running  and 
cracking  up  the  gas  oils  at  the  same  price  would  average  about 

11  cents  per  barrel,  barrels  and  packing  at  14  cents,  loading 
and  shipping  at  8  cents,  and  office  department  at  10  cents, 
total  cost  of  refining  would  be  $1.21. 


IS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  ?  643 

We  allow  for  overhead  and  extras  and  royalty  to  the  land- 
owners— if  you  own  your  own  oil  shale  beds  you  pay  no 
royalty — estimating  the  crude  at  mid-continent  prices,  $2.25, 
interest  at  8  cents,  amortization,  management  and  overhead 
25  cents  a  ton,  and  it  would  be  rankly  extravagant  manage- 
ment that  would  require  25  cents  for  overhead  and  manage- 
ment, but  a  good  many  promoters  will  undoubtedly  foist 
themselves  and  we  must  speak  in  general  average  terms.  Then 
in  that  case  allowing  for  all  known  factors,  and  50  cents  a  ton 
as  an  ultimate  of  safety  for  unknown  factors,  we  have  a  total 
cost  of  $4  a  ton. 

Our  product  will  sell  f .  o.  b.  cars  in  competition  with  petro- 
leum products  (at  the  same  price  for  the  same  quality)  for 
between  $8  and  $9  per  barrel,  and  one  barrel  will  be  our  mini- 
mum output  from  a  ton  of  shale.  We  think  that  a  manufac- 
turing enterprise,  from  which  you  can  consider  every  factor, 
that  offers  a  turn-over  every  day  of  100  per  cent,  is  an  attrac- 
tive enterprise;  we  know  of  very  large  enterprises  employing 
thousands  of  men  which  are  pleased  and  satisfied  with  a  turn- 
over of  10  to  20  per  cent. 

We  believe,  from  considering  every  angle  of  it,  that  the 
shale  oil  industry  is  a  successful  business  enterprise,  if  entered 
upon  with  the  same  care  and  consideration  and  with  the  same 
principles  and  management  that  you  gentlemen  use  in  man- 
aging other  mining  and  manufacturing  enterprises. 

The  minimum  income  from  a  ton  of  shale  should  be  $8, 
and  the  maximum  expense  should  not  exceed  $4,  and  many  of 
our  shales  will  produce  $12  and  upward.  Now,  then,  if  you  had 
an  unlimited  coal  mine  opened  up,  exposed  at  the  surface,  and 
you  had  an  unlimited  market  for  that  coal  at  more  than  100 
per  cent,  over  what  it  cost  you  to  mine  it  and  put  it  at  the 
mouth  of  the  mine,  you  would  consider  that  you  had  a  magnifi- 
cent enterprise. 

Not  Fictitious  Values 

You  will  note  that  we  have  not  gone  into  the  fictitious  or 
imaginary  value  of  by-products  so  often  heralded  as  the  main 
issue,  and  which  may  or  may  not  be  a  success,  which  we  are 
willing  to  consider,  and  we  believe  that  in  the  future  very 
valuable  industrial  enterprises  will  be  worked  out  from  them, 


644         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

but  today  we  cannot  count  upon  them  because  we  have  not 
the  known  factors  of  cost  and  market,  but  with  the  oil  pro- 
duction we  have  these  factors. 

We  always  deprecate  the  extravagant  advertising  of  promo- 
tion enterprises  which  try  to  make  the  public  believe  that  there 
are  in  the  oil  shales  an  unlimited  amount  or  a  limited  amount 
of  the  rare  metals,  gold,  platinum,  molybdenum,  and  others 
that  you  may  possibly,  in  isolated  cases,  find  a  trace  of.  I 
believe  any  man  who  attaches  himself  to  that  statement  is 
deliberately  lending  his  reputation  to  a  fraud  and  he  should 
not  be  countenanced.  If  there  are  isolated  cases,  they  should 
be  treated  as  such  and  not  as  a  shale  oil  enterprise.  I  have 
looked  with  a  great  deal  of  suspicion  on  literature  emanating 
from  a  number  of  quarters  which  held  out,  as  a  rare  bait  to  the 
public,  the  fact  that  these  rare  metals  existed.  Now,  if  any 
gentleman,  or  engineer,  or  chemist  can  be  found  to  extract 
those  rare  minerals,  he  should  advertise  it  purely  as  a  metallic 
proposition,  and  not  put  it  on  a  legitimate  proposition  like 
manufacturing  oil. 

I  think  this  covers  the  business  features  as  we  have  gone 
into  them,  and  there  are  a  great  many  engineers  who  have 
gone  into  long  lines  of  research  which  are  very  valuable.  I 
presume  a  number  of  them  are  here  today. 

I  think  we  have  been  able  to  show  you  the  series  of  pro- 
duction which  we  can  obtain  from  the  crude  oil,  and  our  basic 
figures  that  we  estimate  can  be  obtained  from  a  barrel  of  crude 
oil.  Gentlemen,  I  thank  you.  [Applause.] 

(By  MR.  ROBERTS,  of  Chicago.)  Mr.  Chairman:  I  wish  to  ask  re- 
garding crushing  the  raw  shale  and  the  cost  of  the  crushing. 

I  also  gleaned  from  Mr.  Gavin's  report  that  we  did  not  know  yet,  from 
a  commercial  standpoint,  as  to  whether  or  not  the  petroleum  produced 
from  our  oil  shales  in  this  country  would  be  of  such  color  and  odor  that 
they  might  require  a  further  treatment — what  process,  I  do  not  know — 
before  they  could  be  used  as  commercial  products.  I  should  like  those 
two  questions  explained,  if  possible. 

CHAIRMAN  ALDERSON:   Mr.  Jones,  can  you  answer  the  question? 

MR.  JONES:  I  would  be  glad  to  answer  the  gentleman  so  far  as  we 
have  been  able  to  determine.  I  think  Mr.  Robets  will  recall  I  qualified 
my  remarks  by  saying  that  the  shale  was  crushed  to  various  degrees  of 
fineness  according  to  the  process  adopted;  there  is  no  set  rule  excepting 
that  the  different  processes  use  different  degrees  of  crushing,  and  that 


TS  THE  SHALE  OIL  INDUSTRY  A  BUSINESS  PROPOSITION  7645 

if  a  process  were  adopted  which  required  very  fine  crushing,  it  would 
increase  the  cost  of  operations.  I  think  that  was  in  fact  my  statement, 
and  leaving  that  to  the  individual  engineer  according  to  the  conditions  met 
in  his  mechanism. 

Now,  as  to  the  quality  of  petroleum  we  have  found,  as  Mr.  Wallace 
has  stated,  and  as  Mr.  Gavin  has  stated,  that  varying  degrees  of  tem- 
perature change  materially  the  quality  of  the  oils  and  change  materially 
the  refining  value  of  the  oils,  or  the  refined  value  of  the  oils  after  they 
were  passed  through  the  refining  process.  We  will  admit  that  shale  oils 
require  more  treatment  in  the  way  of  agitating,  washing  and  rerunning 
than  petroleum  oils,  and  in  our  tables  we  have  allowed  for  the  additional 
expense  of  such  treatment.  But  we  also  find  that  the  oils  can  be  cleaned, 
scrubbed  and  deodorized  so  that  they  are  commercially  good  oils,  and, 
as  far  as  the  standard  of  the  value  of  the  oil  is  concerned,  we  rely  on 
the  test  made  by  the  Bureau  of  Standards  in  Washington,  which  we  think 
is  the  ultimate  authorty  in  this  country. 


646         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


SOME  PROBLEMS  OF  THE  AMERICAN  OIL  SHALE 

INDUSTRY 

By  MARTIN  J.  GAVIN,  Refinery  Engineer,  U.  S.  Bureau  of  Mines 

(Presented  by  permission  of  the  Director,  U.  S.  Bureau  of  Mines) 

The  possible  importance  of  this  country's  vast  deposits  of  oil 
shale  as  a  new  source  of  hydrocarbon  oils  has  been  brought  to 
the  serious  attention  of  the  public  only  within  the  past  few 
years.  In  this  relatively  short  time  many  investigators  have 
been  working  on  various  phases  of  the  more  obvious  problems, 
but  as  yet  only  a  beginning  has  been  made  and  we  have  little 
practical  knowledge  of  the  working  of  oil  shales,  especially  on  a 
scale  large  enough  to  make  the  industry  an  important  source 
of  oils  similar  to  those  now  derived  from  oil  wells. 

In  only  one  country  has  an  oil  shale  industry  been  established 
on  a  firm  basis.  That  country  is  Scotland,  where  oil  shales 
have  been  worked  on  a  commercial  scale  for  upward  of  sixty 
years. 

Although  Scotch  oil  shales  are  not  altogether  like  Ameri- 
can shales  and  conditions  in  the  two  countries  differ  in  many 
respects,  it,  nevertheless,  seems  that  before  attacking  our  own 
problems  we  should  thoroughly  understand  Scotch  practice  and 
problems.  In  other  words,  it  seems  logical  that,  at  the  start, 
we  should  make  the  most  of  the  knowledge  gained  in  Scotland, 
even  if  later  we  must  modify  or  altogether  abandon  Scotch 
ideas  and  practice. 

Scotch  Methods  Explained 

Therefore,  I  will  outline  the  methods  practiced  in  Scotland 
for  mining,  crushing  and  retorting  the  shales,  refining  the  oils 
and  producing  sulphate  of  ammonia.  This  will  not  only  serve 
to  point  out  certain  misconceptions  regarding  Scotch  practice, 
but  will  aid  a  better  understanding  of  our  own  problems. 

In  Scotland  the  mining  of  oil  shales  is  invariably  done  by 
what  is  known  as  the  "Pillar  and  Stoop"  or  "Pillar  and  Room" 
method.  A  shaft  or  incline  is  sunk  from  the  surface  to  the 
main  seam  of  shale  and  from  the  bottom  of  the  shaft  galleries 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY         647 

are  driven  in  all  directions,  ultimately  to  the  limits  of  the  shale 
that  is  to  be  mined  through  the  shaft.  Due  provision  is  made, 
of  course,  for  ventilation,  drainage,  safety  conditions  and  haul- 
age to  the  main  gallery.  Shale  is  hauled  in  the  galleries  to  the 
main  shaft  or  incline,  whence  it  is  taken  to  crushers  on  the  sur- 
face by  cars  operated  by  endless  ever-running  steel  cables,  or 
by  skips.  The  shale  mining  laws  are  the  same  as  those  regu- 
lating coal  mining  and  are  enforced  in  the  same  manner  under 
the  same  act. 

After  the  galleries  have  been  driven  as  far  as  feasible,  the 
pillars,  which  have  been  left  between  the  cross-sectioning  of 
the  galleries  and  which  until  now  are  much  larger  than  the 
latter,  are  trimmed  down,  working  backward  from  the  out- 
side. Several  seams  are  successively  worked  from  one  main 
shaft.  Approximately  25  per  cent,  of  the  shale  is  left  in  the 
ground  as  small  pillars  or  as  finely  divided  refuse  and  shale 
of  poor  quality.  As  the  pillars  are  trimmed  down  the  roof 
gradually  sinks  in,  and  this  movement  often  extends  to  the 
surface  of  the  ground.  Electricity  is  used  for  light  and  power. 
A  man  "working  at  the  face"  produces  about  4V&  short  tons  of 
shale  per  day  of  eight  hours.  Recently  the  Scotch  operators 
have  been  having  trouble  by  reason  of  the  miners'  demands  for 
more  pay,  shorter  hours  and  the  like.  The  profit  per  ton  of 
shale  is  relatively  small  and  any  large  increase  in  the  wage 
scale  or  decrease  in  production  per  man  would  be  a  matter  of 
serious  concern. 

At  the  surface  the  shale  is  broken  by  two  large,  slowly 
revolving,  toothed  rolls.  The  maximum  size  of  broken  pieces 
is  6x6x12  inches  and  the  average  size  about  that  of  an  ordi- 
nary brick.  Fines  are  not  screened  out,  as  they  can  be  handled 
in  the  retorts  if  properly  mixed  with  the  coarser  material. 

From  the  breakers  the  shale  is  carried  in  cars  by  rope  haul- 
age up  an  incline  to  the  top  of  the  retorts,  where  it  is  dumped 
into  the  retort  hoppers  by  hand.  The  Scotch  retorts  are  ver- 
tical and  tapered,  consisting  of  the  following  parts:  At  the 
top  is  a  hopper,  which  holds  several  hours'  supply  of  shale. 
Below  the  hopper  is  a  cast-iron  upper  part  which  is  about  12 
feet  in  length  and  which  has  a  vapor  outlet  near  the  top. 
Under  the  cast-iron  part,  and  joined  to  it  with  a  fire  clay  joint, 
is  the  lower  masonry  part,  which  is  about  18  feet  high  and  made 


648         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  a  single  tier  of  very  specially  shaped  fire  brick.  At  the  bot- 
tom of  this  part  is  the  discharge  mechanism  and  below  that 
the  spent  shale  hopper,  which  serves  two  retorts  and  in  which 
the  spent  shale  accumulates.  The  cast-iron  part  is  made  cir- 
cular or  elliptical  in  cross-section  and  the  masonry  part  square 
or  circular.  Those  of  circular  cross-section  have  an  internal 
diameter  of  about  two  feet  at  the  top  and  three  feet  at  the  bot- 
tom. The  taper  is  constant. 

Each  retort  with  its  supply  hopper  holds  about  nine  tons  of 
shale  and  the  feed  is  by  gravity.  Four  retorts,  as  described, 
are  set  in  a  common  furnace  and  are  heated  by  the  combustion 
of  the  fixed  gases  resulting  from  the  distillation  of  the  shale, 
supplemented  by  coal  producer  gas  when  necessary.  Four 
retorts  is  a  unit,  and  16  such  units  constitute  a  bench,  2  retorts 
wide  and  32  retorts  long.  The  present  retort  working  on  shale 
now  being  mined  in  Scotland  has  a  capacity  of  about  4%  short 
tons  per  day.  Tests  indicate  that  the  retort  capacity  is  a  func- 
tion of  oil  production  rather  than  shale  throughout.  A  retort 
will  produce  approximately  100  gallons  of  oil  a  day,  whether 
it  is  working  on  10-gallon  shale  or  100-gallon  shale.  In  the 
former  case  approximately  10  tons  can  be  put  through ;  in  the 
latter  but  one. 

In  the  upper  or  cast-iron  part  of  the  retort  the  most  of  the 
oil  distills  and  the  maximum  temperature  in  this  part  does  not 
exceed  900°  F.  The  lower  or  masonry  part  serves  mainly  as 
an  ammonia  and  gas  producer.  About  105  gallons  of  water,  as 
exhaust  steam  for  each  25  gallons  of  oil  produced,  is  admitted 
into  the  spent  shale  hopper  and  passes  up  through  the  shale  in 
the  retort.  The  steam  serves  to  absorb  the  heat  from  the  spent 
shale,  to  produce  water  gas  from  the  fixed  carbon  remaining 
in  the  spent  shale,  to  distribute  evenly  the  heat  in  the  retort, 
to  produce  ammonia  from  the  nitrogen  of  the  shale,  and  to 
carry  off  the  oil  products  formed.  Distillation  with  steam 
increases  the  yield  of  ammonia  about  2*/2  times  as  compared 
with  dry  distillation  and  also  produces  more  oil  of  higher 
quality. 

Temperature  1800  Degrees 

The  maximum  temperature  to  which  the  shale  is  subjected 
is  not  much  in  excess  of  1,800°  F.,  although  temperature  meas- 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY         649 

urements  have  never  been  accurately  made  within  the  retort 
itself.  The  spent  shale  is  discharged  continuously  and  the 
mechanisms  used  for  this  purpose  constitute  the  main  points 
of  difference  between  the  types  of  retorts.  The  spent  shale  is 
refuse.  No  commercial  use  has  ever  been  found  for  it,  although 
it  has  been  tried  in  road  and  brick  making.  The  fixed  carbon 
remaining  in  the  shale  amounts  to  only  11/2  to  2  per  cent.  This 
is  the  economic  limit  with  reference  to  fuel  consumption 
through-put  of  shale  and  ammonia  and  gas  yield.  A  greater 
yield  of  ammonia  could  probably  be  obtained  by  reducing  the 
amount  of  carbon,  but  at  the  expense  of  through-put. 

Vapors  pass  out  of  the  retort  through  the  vapor  line  which 
is  cast  integral  with  the  upper  part  of  the  retort.  Large  suc- 
tion fans  in  the  dry  gas  main,  between  the  scrubbers  and  gas 
burners,  put  a  slight  suction  on  the  retorts.  The  vapors  go  to 
large  headers  and  Whence  to  a  series  of  U-shaped,  vertical,  air- 
cooled,  condensers  made  of  cast-iron  pipe.  Below  each  U  is  a 
receiving  box  for  condensate  and  from  this  box  the  condensed 
oil  and  ammonia  water  are  drawn  off  to  separating  tanks. 
Uncondensed  gases  pass  through  water  scrubbers,  which  re- 
move any  ammonia  remaining  in  the  permanent  gases,  and 
through  oil  scrubbers,  which  remove  the  light  hydrocarbons, 
commonly  known  as  "scrubber  naphtha."  The  gas  is  then  led 
back  to  the  retort  furnaces,  where  it  is  burned. 

Shale  now  being  worked  in  Scotland  yields  per  short  ton 
approximately  10,000  cubic  feet  of  gas  having  a  heat  value  of 
about  240  B.  t.  u.  per  cubic  foot,  approximately  24.5  U.  S. 
gallons  of  crude  oil  and  36  pounds  ammonium  sulphate. 

The  crude  oil,  after  having  the  bulk  of  the  water  separated, 
is  run  to  the  refinery.  The  refining  of  this  oil  is  more  involved 
and  complicated  than  the  refining  of  petroleum,  as  the  oil  must 
be  subjected  to  more  acid  and  alkali  treatments  and  a  greater 
number  of  distillations.  This  means  that  a  shale  oil  refinery 
contains  more  small  stills  and  agitators  than  does  a  petroleum 
refinery  of  equal  capacity.  More  discontinuous  stills  are  used 
than  continuous  stills  and  the  Scotch  shale  oil  refineries  have 
extraordinarily  large  wax  plants,  compared  with  petroleum 
refineries  of  equal  capacity. 

Practically  all  refinery  distillations  are  conducted  with  a 
large  quantity  of  steam,  which  is  admitted  into  the  bottoms  of 


650         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  stills.    The  crude  oil  is  run  to  coke,  as  are  also  some  of  the 
re-distilled  oils. 

The  Average  Yield 

The  yield  of  refined  products  is  somewhat  as  follows : 

Per  Cent. 

Naphtha  (including  scrubber  naphtha)  450°  F.  end-point. . .  9.9 

Burning  oils  (kerosene  and  the  like) 24.7 

Gas  and  fuel  oils 24.4 

Lubricating  oils 6.7 

Wax 9.5 

Still  coke 2.0 

Loss 22.8 

100.0 

Attention  should  be  directed  to  the  high  refining  loss,  which 
consists  of  (1)  chryseme,  of  little  known  value  except  possibly 
as  a  wood  preservative;  (2)  acid  and  alkali  tars  or  sludges, 
which  are  largely  used  as  fuel  in  the  refinery  after  recovery  of 
the  free  acid  from  them,  and  (3)  permanent  gases  with  a  high 
calorific  and  illuminating  value,  which  are  used  for  illuminating 
or  fuel  purposes. 

Scrubber  naphtha,  which  is  the  gasoline  or  naphtha  recov- 
ered from  the  retort  gases  by  washing  them  with  oil  and  sub- 
sequently distilling  the  latter,  amounts  roughly  to  2.4  gallons 
per  ton  of  shale. 

Ammonia  water  from  condensers  and  scrubbers  is  run  to 
ordinary  continuous  ammonia  stills.  Ammonia  gases  pass  off 
and  are  dissolved  in  dilute  sulphuric  acid,  much  of  which  is 
recovered  from  the  acid  tars.  The  sulphate  solution  is  con- 
centrated by  a  continuous  system  and  is  finally  purified  and 
sold  as  crystalline  ammonium  sulphate. 

While  the  Scotchman  has  never  done  any  extensive  research 
on  the  chemical  properties  of  his  crude  oil,  he  does  know  that 
proper  retorting  means  the  success  of  his  industry.  He  aims 
to  produce  within  economic  limits  the  greatest  amount  of  oil 
that  will  yield  the  greatest  quantity  of  refined  products  for 
which  he  has  established  a  market.  He  has  found  that  the 
shale  must  be  heated  gradually  and  plenty  of  steam  must  be 
used  in  retorting.  Also  he  has  discovered  the  best  way  to  turn 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY         651 

the  major  portion  of  his  nitrogen  into  ammonia,  rather  than 
allowing  it  to  form  troublesome  compounds  in  his  oil,  or  to 
throw  it  away  in  the  spent  shale.  His  most  valuable  product  at 
present  is  paraffin  wax,  and  his  efforts  are  directed,  both  in 
retorting  and  refining,  to  a  maximum  production  of  this  sub- 
stance, but  not,  however,  to  the  exclusion  of  other  less  valuable 
products. 

Some  say  his  methods  are  antiquated.  He  can  teach  most  of 
our  refiners  a  great  deal  regarding  plant  economics  and  labor- 
saving  devices  and  his  retorts  are  the  result  of  years  and  years 
of  evolution  and  experimental  work  under  extremely  practical 
conditions.  True,  he  doesn't  give  much  time  to  certain  scien- 
tific investigations,  but  he  has  an  outfit  that  yields  at  a  profit 
products  for  which  there  is  a  well-establisheed  market. 

Costs  of  Mining 

From  their  bearing  on  some  of  our  own  problems,  it  may  be 
well  to  give  an  idea  of  the  costs  for  mining,  crushing,  retorting 
and  refining  in  Scotland.  Of  course,  under  American  condi- 
tions costs  may  differ  and  the  same  relative  distribution  may 
not  apply.  But  the  Scotch  figures  should  be  of  interest  as  a 
basis  for  cost  consideration  and  should  indicate  in  a  way  where 
the  greatest  effort  toward  reducing  costs  could  be  made. 

At  present  the  percentage  distribution  of  costs  in  Scotland 

is  about  as  follows : 

Per  Cent. 

Mining 53.0 

Crushing  and  retorting 18.5 

Recovering  sulphate  of  ammonia 13.2 

Refining  oil 15.3 

100.0 

Of  importance  is  the  fact  that  the  cost  of  mining  is  more 
than  half  the  total  cost  of  producing  refined  products  from  the 
raw  shale.  Many  of  our  shales  will,  no  doubt,  be  worked  more 
readily  than  Scotch  shale,  but  clearly  the  mining  cost  will  make 
up  a  large  part  of  the  total,  and,  therefore,  mining  methods  and 
the  reduction  of  mining  costs  should  be  given  serious  and  thor- 
ough consideration.  In  all  probability  a  saving  of  10  per  cent, 
in  the  cost  of  mining  will  be  much  more  important  than  one  of 
10  per  cent,  in  retorting  or  refining. 


652         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  importance  of  the  mining  cost  is  shown  by  recent  events 
in  Scotland.  The  Scotch  shale  miners  struck  in  order  to  force 
the  operators  to  pay  them  the  same  wage  scale  as  the  coal 
miners  had  been  awarded.  As  the  increase  demanded  would 
have  sufficed  to  wipe  out  the  small  profit  now  being  made  by 
the  shale  operators,  the  latter  shut  down  their  plants.  When 
the  miners  realized  the  state  of  affairs  they  came  back  to  work, 
as  I  understand,  having  gained  nothing  by  their  strike,  but 
having  lost  not  only  the  time  they  were  out  but  also  the  two  or 
three  weeks  required  for  warming  up  the  retorts  to  capacity 
production. 

As  regards  some  of  our  own  shale-mining  problems,  they  can 
be  merely  summarized  in  this  discussion. 

Oil  shale  is  tougher  than  coal,  most  of  the  deposits  are  hori- 
zontal, or  nearly  so,  many  outcrop  high  up  in  the  walls  of  cliffs 
and  canons,  and  most  of  them  in  the  Rocky  Mountain  country 
lie  at  altitudes  of  5,000  to  8,000  feet.  Mining  engineers  think 
the  shale  will  be  mined  much  as  coal  is  mined  and  at  a  cost 
about  the  same  as  or  a  little  less  than  that  of  mining  coal  in  the 
same  relative  locality. 

Methods  of  Mining 

The  impression  has  been  created  that  shale  can  be  mined  by 
open-cut  or  quarrying  methods  permitting  the  use  of  steam 
shovels.  Probably  there  are  a  few  locations  Where  such  mining 
may  be  done,  but  it  may  be  safely  stated  that,  after  a  short 
period  at  least,  the  majority  of  our  shale  deposits  will  be  mined 
by  galleries  and  tunnels. 

To  theorize  regarding  the  problems  and  costs  of  oil  shale 
mining  is  of  little  value,  as  the  costs  cannot  be  determined  or 
the  problems  solved  until  mining  is  on  a  commercial  scale,  and 
practical  commercial  mining  will  not  be  done  until  shales  are 
treated  in  commercial  quantities  at  a  profit. 

As  regards  crushing,  the  type  of  crusher  used  will,  of  course, 
depend  on  the  degree  of  fineness  to  which  the  shale  is  to  be 
reduced,  and  that  in  turn  will  depend  on  the  retorting  process 
used.  Toothed  rolls  work  nicely  in  Scotland,  and  should  here, 
if  we  do  not  want  to  reduce  our  shales  to  very  fine  pieces,  but 
many  of  the  proposed  processes  intend  to  use  shale  of  quarter- 
inch  size ;  some  prefer  20  mesh  and  one  80  mesh.  Reducing  our 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY         653 

rich  shales  to  such  small  sizes  is  difficult;  the  shales,  warmed 
by  the  crushing,  tend  to  gum  together  and  clog  the  machine. 
What  type  of  crusher  will  be  found  best  for  a  particular  shale? 
Will  it  be  the  jaw  crusher,  ball  mill,  hammer  mill,  gyratory 
crusher,  some  other  known  type,  or  must  we  develop  a  new 
type?  We  have  little  practical  information  on  this  subject. 

The  major  problems  in  connection  with  our  oil  shale  industry 
are  those  involved  in  retorting  the  shale  and  refining  the  oil. 
We  look  to  our  shales  to  supply  us  with  the  products  now  ob- 
tained from  petroleum  and  our  task  is  to  produce,  with  due 
regard  to  economic  considerations,  the  greatest  amount  of 
crude  oil  that  will  yield  the  greatest  quantity  of  products  for 
which  there  is  a  demand. 

A  broad  view  of  retorting  problems  shows  that  the  first  ques- 
tion to  be  considered  is  whether  Scotch  practice  can  be  adopted 
in  toto  for  American  shales  and  conditions.  Must  it  be  modi- 
fied, and  how  ?  Or  must  it  be  abandoned  entirely  ?  The  same 
questions  hold  with  respect  to  refining.  Some  persons  believe 
that  Scotch  practice  must  be  abandoned  entirely.  Personally, 
I  feel  that  at  least  it  must  be  altered  more  or  less  to  meet  our 
conditions.  Most  of  us,  I  am  sure,  feel  that  Scotch  ideas  and 
practices  need  not  be  altogether  abandoned. 

Practically  all  our  rich,  massive  oil  shales  tend  to  fuse,  sinter 
or  coke  in  the  retort.  Obviously,  handling  of  such  substances 
is  difficult,  especially  in  continuous  retorting.  Even  the  Scotch 
shales  have  a  tendency  to  bridge  and  clog  in  the  retort.  The 
working  out  of  retorting  methods  and  conditions  to  overcome 
this  difficulty  is  even  more  serious  with  our  shales  and  must  be 
given  careful  attention. 

Another  problem  is  the  most  suitable  material  for  retorts, 
and  especially  the  possibilities  of  using  a  refractory  other  than 
ordinary  fire  brick.  When  the  coal  by-product  coke  plants  were 
introduced  into  this  country  from  Europe  ordinary  fire  brick 
were  universally  used  as  refractories,  but  our  industry  was  not 
well  satisfied  with  the  heat-conducting  capacity  of  such  brick 
and  other  materials  were  tried.  As  a  result  other  refractories 
were  discovered  which  greatly  increased  the  rate  of  heat  trans- 
mission from  the  furnace  to  the  charge  in  the  retort.  We  may 
expect  to  gain  much  assistance  from  those  who  derived  such 
refractories,  and  the  possibilities  of  the  use  of  silica  or  carbor- 


654         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

undum  refractories  and  the  like  seem  to  be  favorable.  There 
should  also  be  given  serious  consideration  the  possibility  of 
using  recently  developed  alloys  capable  of  standing  high  tem- 
peratures. 


Factors  to  Determine 

Certain  individual  factors  that  influence  retorting,  and 
thereby  the  quantity  and  quality  of  products  made,  deserve 
careful  study.  Some  of  these  may  be  mentioned : 

1.  Rate  of  rise  of  temperature  of  the  shale. 

2.  Temperature  to  which  the  shale  is  subjected. 

3.  Amount  of  steam  or  other  vapors  or  gases,  such  as  carbon 
monoxide,  used  in  connection  with  retorting. 

4.  Fineness  of  the  shale. 

5.  Pressure  under  which  retorting  is  carried  on. 

6.  Time  of  contact  of  vapors  with  retort  walls. 

After  these  factors  are  determined  they  must  be  applied  to 
large  scale  work.  Then  the  problem  becomes  one  of  finding  the 
particular  type  of  retort  that  will  supply  the  best  conditions  at 
lowest  cost.  Another  problem  is  the  determination  of  heat 
transmission  and  specific  heats  and  other  physical  and  chemical 
constants  of  various  shales,  in  order  to  apply  best  engineering 
principles  to  large  scale  retorts  and  retorting  operations. 

.Retorting  and  refining  are  intimately  inter-related.  The 
obtaining  of  crude  oil  from  shale  is  simple  and  needs  merely 
heating,  with  exclusion  of  air  and  subsequent  condensation  of 
vapors,  but  the  economic  production  of  the  maximum  quanti- 
ties of  the  most  valuable  oils  from  the  refiner's  standpoint  is 
not  a  simple  but  a  difficult  and  complex  problem.  Therefore, 
the  study  of  the  production  of  oil  and  other  products  carried 
out  under  different  conditions,  as  mentioned  above,  will  not  be 
complete  until  the  products  so  obtained  have  been  subjected 
to  thorough  refinery  study  and  chemical  examination. 

It  is  entirely  conceivable  that  certain  conditions  of  retorting 
will  produce  an  oil  that  will  be  valueless  from  the  refiner's 
standpoint,  and  many  inventors  who  are  seeking  to  develop  a 
retort  with  extremely  large  unit  through-put  do  not  see  that  the 
quality  of  the  oil  produced  is  as  important  as  the  quantity,  and 
often  is  more  important. 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY         655 

The  Scotch  operators  know  the  conditions  that  give  them  the 
best  economic  yields  of  oil  of  the  best  refining  quality.  They 
have  fixed  these  conditions  for  their  shales,  but  these  condi- 
tions will  probably  be  different  for  other  shales  and  must  be 
determined.  Even  in  Scotland  changes  in  conditions  might 
arise  which  would  make  a  product  now  of  little  value  more 
valuable  than  other  products  for  which  there  has  been  an  ur- 
gent demand.  In  such  event  the  retorting  conditions  might 
have  to  be  changed  to  obtain  the  greatest  return.  The  success 
of  the  Scotch  industry  depends  primarily  on  its  production  of 
wax  and  ammonia.  I  will  discuss  ammonia  later.  As  regards 
wax,  the  present  condition  of  the  market  for  wax  in  this  coun- 
try is  such  that  if  any  large  quantity  were  produced  from  a  new 
source  it  is  difficult  to  see  where  it  could  be  sold  profitably. 

Shale  Oil  Future 

We  look  to  our  oil  shales  primarily  to  supply  the  country 
with  refined  hydrocarbon  oils  when  our  petroleum  supplies  fail 
to  adequately  meet  the  demand.  Therefore,  we  must  produce 
a  refinable  oil — an  oil  produced  under  some  conditions  may  not 
answer.  It  must  yield  marketable  products  and  the  retorting 
conditions  must  be  such  that  each  shale  oil  will  yield  the  maxi- 
mum quantities  of  refined  products  consistent  with  economic 
considerations.  Absolute  quantity  of  yield  may  have  to  be 
sacrified  for  quality. 

The  Scotch  industry  has  never  been  able  to  produce  commer- 
cially the  lubricating  oils  suitable  for  internal  combustion 
motors,  steam  cylinders,  or  high-duty  bearings.  Possibly  we, 
by  producing  oils  yielding  less  of  the  more  volatile  products, 
or  by  applying  new  conditions,  can  make  satisfactory  lubri- 
cants for  these  purposes ;  possibly  we  cannot.  What  conditions 
of  retorting  will  be  most  favorable  for  the  production  of  lubri- 
cating oils?  Must  we  sacrifice  other  products  for  lubricants, 
or  will  the  reverse  hold  good  ? 

The  Scotch  industry  has  been  successful  mainly  by  reason 
of  its  large  recovery  of  sulphate  of  ammonia.  Is  the  nitrogen 
in  our  shales  in  such  form  as  to  yield  ammonia  easily?  Prob- 
ably it  is,  but  we  don't  know  positively  the  conditions  whereby 
we  can  obtain  absolute  maximum  yields  or  maximum  economic 
yields.  Ammonia  is  being  produced  by  new  and  cheap  methods 


656         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  we  may  find  it  advantageous  not  to  concentrate  attention 
on  recovering  ammonia  from  our  shales,  if  by  neglecting  am- 
monia we  can  cut  down  our  costs,  obtain  a  larger  through-put 
and  increase  the  retort  capacity  for  oil. 

Because  of  refining  difficulties  nitrogen  containing  com- 
pounds should  be  excluded  from  the  oil  as  far  as  possible,  and 
if  oil  is  desired  as  the  main  product,  the  conditions  should  be 
such  as  to  eliminate  them.  What  retorting  conditions  will 
bring  about  this  elimination  ?  Will  they  be  the  same  as  those 
best  suited  for  Scotch  shales,  and  will  they  be  the  same  for  all 
our  shales?  In  connection  with  the  utilization  of  our  shales, 
the  possibility  of  recovering  the  nitrogen  as  pyridines  or 
pyrrols  rather  than  as  ammonia  is  being  studied,  as  well  as  the 
recovery  of  the  ammonia  in  whatever  form  seems  most  desir- 
able by  apparatus  entirely  separate  and  independent  of  the  oil- 
producing  retort.  The  individual  Scotch  retort  performs  two 
functions — namely,  that  of  oil  production  in  the  upper  cast-iron 
part  at  a  temperature  below  900°  F.,  and  that  of  ammonia  and 
water  gas  production  in  the  lower  masonry  part  at  high  tem- 
peratures. Can  or  can  we  not,  by  carrying  the  two  processes 
out  in  independent  stages,  increase  through-put  per  unit  and 
at  the  same  time  obtain  satisfactory  products  ?  This  phase  of 
the  industry  should  receive  careful  attention. 

As  regards  the  refining  of  shale  oils,  it  should  be  mentioned 
that  Scotch  shale  oil  fractions  are  highly  unsaturated — that  is, 
they  contain  certain  olefins  and  diolefins  which  must  be  re- 
moved, together  with  nitrogen  bases,  before  the  products  are 
of  commercial  grade.  If  they  are  not  removed,  the  color  and 
odor  of  the  products  are  bad,  and  gums  and  resins  are  slowly 
deposited,  rendering  the  oils  useless  for  power  and  illuminating 
purposes.  Removal  of  these  unsaturated  compounds  requires 
several  acid  and  alkali  treatments  and  re-distillations,  and  ac- 
counts for  the  high  refining  loss  at  Scotch  plants.  Some  indi- 
vidual problems  and  studies  in  connection  with  refining  are : 

1.  Determination  of  the  resin-forming  compounds  and  meth- 
ods of  removing  them  without  removing  other  harmless  un- 
saturates. 

2.  Development  of  improved  and  cheaper  methods  of  re- 
fining. 

3.  Recovery  of  acid  and  alkali  from  sludges  in  treating. 


SOME  PROBLEMS  OP1  THE  OIL  SHALE  INDUSTRY         657 

4.  Use  of  hydrocarbon  compounds  in  sludges  for  other  pur- 
poses than  fuel. 

5.  Possibility  of  hydrogenating  or  saturating  the  unsaturated 
compounds. 

Loss  in  Refining 

Attention  is  called  again  to  the  high  refining  loss  in  Scotch 
practice.  Approximately  25  per  cent,  of  the  crude,  including 
coke,  is  lost  in  refining,  as  against  a  maximum  loss  of  7  per 
cent,  in  completely  refining  the  average  petroleum.  One  fea- 
ture of  refining  losses  is  that  you  not  only  lose  a  certain  amount 
of  the  oil,  but  must  pay  for  losing  it,  as  the  loss  results  from 
expensive  treatments  made  necessary  by  the  presence  of  objec- 
tionable compounds.  If  the  crude  oil  produced  contains  a 
smaller  percentage  of  these  compounds,  a  saving  is  made  both 
in  respect  to  absolute  recovery  of  refined  products  and  lessened 
cost  of  treatment. 

We  may  find  that  we  cannot,  with  profit,  possibly  by  reason 
of  excessive  refining  losses,  produce  a  sweet-smelling  product 
of  good  color  from  shale  oil,  and  we  may  find  that  those 
products  that  smell  badly  and  are  off  color  are  otherwise  satis- 
factory for  certain  purposes.  Then  will  come  the  problem  of 
educating  the  public  to  accept  and  use  such  products,  perhaps 
in  the  face  of  strong  competition  with  the  present  petroleum 
industry,  a  competition  that  may  grow  less  as  the  price  of 
petroleum  products  rises. 

Much  has  been  said  regarding  by-products,  and  the  impres- 
sion has  been  created  that  the  oil  shale  industry  will  be  suc- 
cessful because  of  its  by-products.  But  by-products  are  a 
rather  unstable  foundation  for  a  new  industry  of  any  magni- 
tude. A  few  small,  individual  plants  might  possibly  run  at  a 
profit  because  of  the  production  of  rare  by-products,  but  when 
hundreds  of  large  plants  begin  work,  will  not  the  price  of  the 
by-products  fall  so  much  that  production  will  become  un- 
profitable? 

Question  of  By-Products 

Granted,  for  the  sake  of  argument,  that  under  certain  con- 
ditions numerous  valuable  products  may  be  obtained  from  our 
•shales,  it  is  highly  probable  that  the  conditions  for  obtaining 


658         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

them  will  not  be  favorable  for  obtaining  also  a  large  yield  of 
refinable  oil,  for  which  there  will  be  a  demand  and  a  more 
stable  market.  The  law  of  supply  and  demand  exists  with  re- 
gard to  the  so-called  by-products  as  well  as  with  any  other 
commodities.  A  valuable,  rare  substance  commands  a  high 
price  because  of  its  rarity,  but  as  soon  as  it  is  produced  in 
quantity,  unless  a  new  demand  is  created  for  it,  its  price  may 
fall  so  low  as  to  make  its  further  production  inadvisable  or  un- 
profitable. Many  of  the  expected  and  discussed  oil  shale  by- 
products include  drugs,  dye  stuffs,  rare  chemicals  and  the  like, 
which  are  now  produced  and  used  in  very  small  quantities,  and 
a  relatively  small  increase  in  their  production  might  well  un- 
balance prices  and  demoralize  markets.  It  is  pretty  certain 
that  retorting  conditions  favorable  for  the  production,  for 
example,  of  products  similar  to  coal  tar  dye-bases  from  oil 
shale  will  not  be  favorable  for  a  maximum  and  commercial 
production  of  volatile  motor  fuels  and  lubricating  oils,  assum- 
ing for  the  moment  that  our  oil  shales  can  be  treated  so  as  to 
yield  such  dye-bases. 

My  personal  opinion  is  that  the  first  task  in  developing  our 
oil  shale  resources  is  to  determine  those  conditions  of  retorting 
and  refining  that  will  produce  the  maximum  quantity  of  refined 
products  now  obtained  from  petroleum ;  then  the  study  of  pos- 
sible by-products  may  begin,  and  finally,  an  economic  balance 
struck  with  regard  to  products,  by-products,  retort  capacity 
and  investment  and  operating  cost.  Products  and  by-products 
will  not  be  interesting  if  the  industry  does  not  pay,  and  the 
chief  consideration  is  refined  oils.  The  idea  is,  of  course,  to 
determine  for  each  particular  shale  deposit  and  type  of  retort 
the  most  econonre  conditions  to  produce  the  greatest  profits, 
giving  due  consideration  to  conditions  of  supply  and  demand. 

In  conclusion,  let  me  tell  you  of  some  of  the  tentative  plans 
of  the  Bureau  of  Mines  for  carrying  on  its  investigation  on  oil 
shales.  Up  to  the  present  time  the  Bureau  has  been  unable  to 
do  any  very  extensive  research  work,  because  of  lack  of  suffi- 
cient funds.  If  a  bill  now  before  Congress  passes  this  obstacle 
will  be  removed,  and  in  the  hope  that  it  may  pass  certain  plans 
have  been  made.  These  plans  are  somewhat  tentative  and 
subject  to  change.  The  course  of  the  work  will  be  largely  in- 
fluenced by  what  the  public  thinks  should  be  done,  and  for  that 


SOME  PROBLEMS  OF  THE  OIL  SHALE  INDUSTRY          659 

reason  I  am  briefly  outlining  to  you  such  plans  as  have  been 
drawn. 

Recommendations  to  Bureau  of  Mines 

After  discussion  with  many  individuals  and  organizations 
honestly  interested  in  the  development  of  an  oil  shale  industry 
and  with  some  of  the  best  technical  men  in  the  country,  I  have 
recommended  to  the  Director  of  the  Bureau  of  Mines  a  program 
which  has  three  purposes : 

1.  Establishment  of  heat  and  other  physical  and  chemical 
"constants"  of  shales  and  of  optimum  conditions  for  retorting 
and  refining. 

2.  Establishment  of  a  method  and  procedure  that  will  afford 
a  basis  of  comparison  of  shales  and  retorting  processes. 

3.  Determination  of  the  possibilities  of  the  Scotch  retort  and 
practice  for  American  shales. 

A  study  of  optimum  conditions  for  retorting  and  refining 
and  determination  of  physical  and  chemical  "constants"  will 
first  be  made  on  a  small  or  laboratory  scale  and  then  expanded 
to  a  scale  large  enough  to  give  information  of  practical  value. 

The  second  stage  in  the  program  has  in  mind  a  method  of 
comparison  of  different  processes,  whereby  data  can  be  ob- 
tained which  will  indicate  the  best  type  of  developed  retort  for 
the  treatment  of  a  particular  shale  and  will  lead  to  the  practical 
application  of  ideas  developed  on  a  small  scale.  It  may  be  pos- 
sible to  combine  the  best  features  of  several  processes  into  one 
better  than  any  or  all. 

In  brief,  the  comparison  plan  contemplates  the  erection  of  a 
standard  Scotch  retort  and  the  selection  of  an  arbitrarily 
chosen  uniform  and  standardized  shale.  The  Scotch  retort 
may  not  be  best  for  our  shales,  but  we  know  how  it  is  built, 
how  it  operates  and  have  much  information  regarding  its  capa- 
bilities. It  will  serve  as  a  yardstick.  We  can  then  try  out  any 
process  in  direct  comparison  with  the  Scotch,  working  on  any 
shale  or  the  standardized  shale,  which  shale  will  be  useful 
when  a  new  process  plant  cannot  be  set  alongside  the  Scotch 
retort.  The  data  so  obtained  in  connection  with  refining  the 
products  in  a  small  scale  but  complete  refinery  will  indicate 
how  much  better  or  worse  a  process  is  than  the  Scotch  and 
thereby  than  any  other  process  similarly  compared.  Data  pre- 


660         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

sented  in  this  nature  will  make  clear  to  the  operator  the  retort 
he  wants  for  his  particular  conditions.  Incidentally,  this  work 
will  also  indicate  the  capabilities  of  the  Scotch  retort  on  Ameri- 
can shales. 

Let  me  again  state  that  these  plans  are  tentative  and  subject 
to  revision  or  change  if  it  seems  that  our  efforts  can  be  ex- 
pended to  better  advantage  in  other  types  of  work. 

Many  Unsolved  Problems 

The  problems  of  the  oil  shale  industry,  both  technical  and 
economic,  are  numerous  and  serious;  so  much  so  that  the 
Bureau  of  Mines  cannot  hope  to  solve  or  even  to  study  them 
all.  Besides  the  obvious  problems,  new  ones  are  sure  to  arise 
as  information  becomes  more  extensive.  In  their  solution  there 
is  room  for  all  who  are  genuinely  interested  in  establishing  an 
oil  shale  industry  in  the  United  States. 

One  of  the  purposes  of  the  Bureau  of  Mines  should  be  to 
serve  as  a  clearing  house  for  information  on  the  subject  of  oil 
shale,  a  position  which  it  is  perhaps  better  qualified  to  fill  than 
any  private  agency,  because  its  ideas  and  views  are  unpreju- 
diced and  the  work  done  by  the  Bureau  is  primarily  for  the 
national  good  and  not  primarily  for  the  benefit  of  individuals. 
To  render  this  service  the  Bureau  must  have  the  co-operation 
of  those  who  are  interested.  Therefore,  on  behalf  of  the 
Bureau  of  Mines,  I  ask  the  whole-hearted  co-operation  of  the 
petroleum  and  mining  industries  of  this  country  and  particu- 
larly that  of  this  American  Mining  Congress,  and  also  their 
suggestions  in  planning  and  carrying  on  this  work  in  such 
manner  as  will  best  serve  the  welfare  of  the  nation. 


METHODS  OF  CONDUCTING  A  PREVENTION  DRIVE       661 


PRACTICAL  METHODS  OF  CONDUCTING  A  NATIONAL 
ACCIDENT  PREVENTION  DRIVE 

By  A.  F.  DUFFY,  Manager,  Safety  Section,  United  States  Railroad 

Administration 

When  I  was  invited  to  speak  at  this  meeting  of  the  American 
Mining  Congress  it  seemed  that  as  I  was  a  railroad  man  any- 
thing I  had  to  talk  about  would  be  foreign  and  uninteresting. 
But  when  I  began  to  think  of  my  early  boyhood  and  remem- 
bered the  unsafe  mine  conditions  in  Pennsylvania  then  as  com- 
pared with  the  many  safety  devices  and  close  inspection  now, 
and  thought  also  of  the  fine  results  we  have  achieved  in  the 
recent  National  Railroad  Accident  Prevention  Drive  and  the 
broadened  and  voluntarily  accepted  responsibility  in  making  for 
better  living  and  working  conditions,  for  the  safer  operation 
of  railroads,  it  seemed  that  you  might  be  interested  in  hearing 
about  this  "Drive"  and  the  practical  methods  adopted.  You 
may  get  an  idea  for  your  own  purposes. 

The  big  thing  behind  the  drive  was  to  get  the  officers,  the 
heads  of  the  railroads,  to  believe  in  the  work,  and  then  getting 
the  confidence  of  the  men — the  rank  and  file — to  build  on  this 
solid,  permanent  foundation  a  structure  for  co-operation  and 
enthusiastic  support.  You  have  to  believe  in  a  thing  to  succeed, 
and  as  we  knew  what  could  be  done,  based  on  what  had  been 
done  in  a  smaller  way,  we  made  definite  progress  from  the  very 
start. 

Plan  of  Organization 

In  order  that  you  may  know  how  the  Safety  Section  of  the 
railroads  under  Federal  control  was  organized  and  carries  on 
its  activities  I  will  have  to  tell  you  of  our  methods  of  bringing 
it  together  in  the  beginning  of  things,  some  months  in  advance 
of  the  drive. 

By  our  permanent  and  standardized  Safety  Committee  plan 
of  organization  there  is  a  representative  of  each  branch  of  the 
service  on  the  committee,  so  as  to  make  it  inclusive,  rather  than 
exclusive — to  have  all  angles  of  suggestion,  rather  than  each 


662         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

department  talking  of  its  own  limited  affairs  and  not  learning 
of  or  knowing  intimately  the  viewpoint  and  practical  sugges- 
tions of  others.  Every  railroad  under  Federal  control  has  this 
kind  of  organization,  and  rather  accurate  statistics,  classifica- 
tions and  comparisons  can  be  made  from  month  to  month  and 
year  to  year.  The  weak  spots  are  developed  and  concentration 
on  the  causes  with  remedies  adequately  applied. 


Composite  Committee 

When  the  Safety  Section  was  first  planned  for  the  railroads 
under  Federal  control,  a  questionnaire  was  sent  out  to  find  out 
what  the  various  roads  had  in  safety  activities  and  their 
methods  of  conducting  meetings  and  personnel  of  committees. 
Some  replied,  even  giving  apology  for  inaction;  others  had 
departmentized  safety — meaning,  for  instance,  the  engineering 
department  had  its  own  little  exclusive  council,  and  other  de- 
partments likewise.  We  saw  that  at  meetings  of  this  kind  when 
a  subject  came  up  about  some  other  departments  the  secretary 
of  the  meeting  was  instructed  to  write  a  letter  to  the  other  de- 
partment, and  that  ended  its  responsibility  and  often  the  item 
was  thereby  dead.  Our  plan  of  organization  has  changed  all  of 
that.  We  now  have  a  composite  committee  of  the  division, 
which  is  composed  of  the  division  superintendent,  the  head 
operating  officer  of  that  unit  of  railroading,  the  division  engi- 
neer, trainmaster,  master  mechanic,  road  foreman  of  engines 
or  traveling  engineer,  signal  supervisor,  division  storekeeper, 
claim  agent  or  adjuster  and  district  or  division  safety  agent  as 
permanent  members,  and  as  rotating  members,  which  are 
changed  in  representation  every  six  months ;  representatives  of 
the  following  crafts  and  branches  of  the  service  are  named: 
Yardmaster,  agent  or  operator,  roadmaster  or  supervisor  of 
track,  track  foreman,  bridge  and  building  department  employee, 
engineman,  fireman,  conductor,  brakeman,  switchman,  car  re- 
pairer or  inspector,  signalman,  shopman,  etc.,  and  secretary. 
A  careful  record  is  kept  of  every  item  offered  or  presented  at 
each  monthly  meeting,  and  these,  if  not  disposed  of  at  once, 
remain  open  items  with  a  serial  number,  and  have  to  be  so  kept 
by  number  and  reported  each  meeting  until  closed  or  finally 
disposed  of. 


METHODS  OF  CONDUCTING  A  PREVENTION  DRIVE        663 

Men  No  Longer  Indifferent 

With  this  unified  system  of  working  and  records  we  have 
shown  a  wonderful  growth  of  interest ;  the  mental  attitude  of 
the  men  changed  from  indifference,  if  not  active  ridicule  and 
hostility,  to  one  of  co-operation  and  increased  enthusiasm.  They 
began  to  realize  that  as  they  were  the  ones  to  get  hurt  they 
were  the  ones  to  be  educated  and  drilled  to  habits  of  care- 
fulness. 

Now  Have  1,700  Committees 

Today  the  Safety  Section  of  the  United  States  Railroad  Ad- 
ministration has  a  permanent  active  organization  of  1,700  com- 
mittees and  27,011  committeemen,  composed  of  8,730  officers 
and  18,281  employees,  and  also  500  supervisors  or  outside 
safety  agents  employed  by  the  individual  railroads  who  devote 
full  time  to  inspecting  work,  shops  and  terminals,  talking  and 
lecturing  the  men,  attending  meetings  and  giving  expert  advice 
and  counsel. 

Great  Saving  of  Life 

We  have  corrected  128,058  unsafe  conditions"  and  52,155  un- 
safe practices  in  the  first  eight  months  of  1919.  In  the  same 
period  of  this  year  we  had  934  fewer  employees  killed  and 
23,531  fewer  employees  injured,  and  a  grand  total  of  1,573 
fewer  cases  killed,  including  employees,  and  25,152  fewer  cases 
injured,  including  employees,  than  the  same  eight  months  of 
1918. 

With  this  kind  of  organization  and  the  experience  of  several 
local  "No  Accident"  campaigns  in  various  parts  of  the  country, 
I  obtained  the  consent  of  the  Director  General  of  Railroads,  Mr. 
Hines,  to  have  a  national  campaign  under  the  title  of  National 
Railroad  Accident  Prevention  Drive  for  the  two  weeks  period 
covering  October  18  to  31.  This  was  a  big  undertaking,  the 
biggest  intensified  safety  campaign  ever  conducted,  but  with 
the  splendid  organization  of  Safety  Committees  and  experi- 
enced safety  agents  behind  us  we  felt  all  we  had  to  do  was  to 
work  a  little  harder,  and  each  railroad  was  given  freedom  of 
action  in  its  methods  of  publicity  and  general  plans.  The 
methods  and  experience  of  the  previous  local  "No  Accident" 
railroad  campaigns  were  given  out  as  helpful  suggestions  in 


664         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

order  that  the  last  half  of  the  October  campaign  might  have 
full  preparation.  I  quote  from  Safety  Section  Bulletin  No.  6, 
issued  August  10,  as  follows : 

Report  of  Two  Weeks'  Campaign 

1.  That  September  and  October  Safety  Committee  meetings  be 
generally  and  specially  called  and  the  drive  definitely  presented, 
and  suggestions  of  members  of  committees  be  solicited  as  to  ways 
and  means  for  getting  results  in  accident  prevention. 

2.  General  inspection  of  tools,  shops,  buildings,  equipment  and 
all  railroad  property,  and  clean-up  periods  be  commenced  Sep- 
tember  15,  and  be  for  short  periods  or  continuously  up   and 
through  the  drive. 

3.  Meetings  early  in  October  held  by  foremen  and  gang  bosses 
of  each  crew  on  the  road,  including  shops,  roundhouses,  repair 
track,  B.  &  B.  department,  etc.,  for  instructions  about  the  drive 
and  team-work. 

4.  Pledge  cards  relative  to  refraining  from  unsafe  practices. 

5.  Bulletins  of  progress  on  roads,  divisions  or  departments  to 
engender   friendly   rivalry  in   making   100    per   cent,   or   clear 
records. 

6.  Railroad  employes'  organizations  co-operating  through  cir- 
culars and  lodge  meetings. 

7.  Publicity  by  circulars,  posters  and  rallies;  and  in  this  con- 
nection,  getting  the  active   co-operation   of  ministers,   schools, 
public   officials,   newspapers   and   periodicals,   automobile   clubs, 
commercial  clubs,  and  all  other  agencies  locally  available.   While 
the  drive  is  for  railroad  officers  and  employes,  the  public  and 
families  are  vitally  interested — sad  accidents  occur  to  the  public 
by  reason  of  railroad  operation,  from  trespassing  and  careless- 
ness at  grade  crossings  and  other  places  on  railroad  property. 

Local  conditions  and  needs  will  largely  govern  the  manner  and 
method  of  conducting  the  drive. 

And  quoting  further  from  the  same  Bulletin  in  order  that 
you  may  understand  the  advanced  mental  preparation : 

The  Safety  Section  is  getting  unqualified  encouragement  about 
the  drive  from  all  sources,  from  some  officials  and  employes  who 
were  heretofore  indifferent  to  the  personal  part  expected  of  them 
in  regular  safety  work.  Now  they  are  awakened  by  this  national 
drive  plan,  and  we  are  having  their  enthusiastic  support.  Genuine 
intelligent  enthusiasm  is  manifested  everywhere,  realizing  that 
everybody  has  a  part,  every  officer  and  employe  must  do  his  work 
in  this  drive,  that  the  personal  responsibility  and  individual  duty 
cannot  be  delegated  or  referred  to  any  one  else,  that  the  task 
while  a  serious  one  has  an  inspiring  phase,  for  it  is  saving  others 
from  possible  accidents  that  would  cause  sorrow  and  misery. 


METHODS  OF  CONDUCTING  A  PREVENTION  DRIVE        665 

Circular  letters  were  written  by  the  Director  General,  Re- 
gional Directors,  Federal  Managers  and  other  officials  to  their 
respective  branches  of  the  railroad  service  to  start  and  keep  up 
the  enthusiasm  of  the  drive.  Posters,  slogans,  buttons  and 
other  devices  in  original  designs  were  made  up  by  the  indi- 
vidual roads,  following  along  the  suggestions  above  quoted. 
And  as  an  example  of  the  way  the  rank  and  file  of  employees 
entered  into  the  spirit  of  it,  I  quote  the  following  from  a  letter 
addressed  to  the  brothers  of  a  lodge  of  railroad  men  on  one  of 
our  Western  railroads: 

This  Safety  Drive  is  our  drive,  much  more  so  than  it  is  the 
railroads  themselves;  therefore,  bear  in  mind  that  the  cam- 
paign is  not  designed  necessarily  merely  to  prevent  accidents, 
but  to  eliminate  them.  We  should  not  merely  arouse  interest 
in  this  drive,  but  enthusiasm  both  individually  and  collectively, 
and  the  conservation  of  life  and  limb  of  our  friends  and  fellow- 
workers  should  arouse  the  enthusiasm  of  each  and  every  member. 
We  ask  that  every  member  engaged  on  this  railroad  make  a  per- 
sonal individual  effort  to  follow  closely  all  the  suggestions  of  the 
Safety  Department  during  this  period,  and  if  this  is  done,  we 
will  make  a  record  of  which  we  will  be  justly  proud. 

One  Regional  Director  offered  a  handsome  solid  silver  cup  to 
the  road  showing  the  best  record  during  the  drive.  Another 
Regional  Director  offered  Safety  Banners,  which  were  awarded 
to  the  two  roads  in  that  region  on  the  following  basis : 

One  banner  was  awarded  to  the  road  employing  2,000  or  more 
men,  which  made  the  largest  percentage  reduction  in  casual- 
ties per  100  men  employed  this  year  as  compared  to  last  year, 
during  the  period  of  the  drive,  October  18  to  31,  1919. 

Another  banner  was  awarded  to  the  road  employing  the  largest 
number  of  men  (as  of  October  16th,  1919)  under  2,000  men, 
which  made  a  clear  record  and  has  no  casualties,  this  award 
being  based  wholly  on  performance  during  the  drive. 

This  was  a  spirited  friendly  contest,  but  a  prize  aside  from 
those  above  mentioned,  and  was  in  reality  won  by  the  men  of 
each  contesting  road,  for  they  contracted  habits  of  safety  and 
have  the  satisfying  knowledge  of  having  been  personally  in- 
strumental in  reducing  the  number  of  casualties  to  their  fellow- 
workers  during  the  campaign. 


666         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Drive  Developed  Good  Feeling 

The  drive  was  a  marvelous  success  in  every  particular,  for  it 
brought  officers  and  men  together  in  a  very  friendly  way.  The 
democracy  of  the  Safety  work,  bringing  the  general  manager 
and  superintendent  in  close  personal  touch  with  the  highest  to 
the  lowest  branch  of  employees  in  service,  in  a  common  but 
important  cause,  has  increased  morale  and  efficiency.  And  in 
thus  bringing  together  it  injected  kindness  and  consideration, 
for  while  it  is  recognized  that  the  mechanical  and  human  ele- 
ments have  the  most  important  bearing  in  Safety  and  Service, 
the  training  of  the  human  is  the  great  problem.  And  in  this 
connection  the  term  Safety  and  Service  took  on  a  greater  sig- 
nificance and  made  them  feel  inspired  in  its  contemplation  in 
definite  relation  to  their  duties.  It  has  been  said  that  a  life 
without  service  is  a  life  without  hope  and  happiness.  Nothing 
good  results  save  through  a  guiding  influence,  in  this  instance 
that  of  unselfishly  serving  some  one.  And  as  the  Safety  move- 
ment has  the  service  of  fellowship  as  its  special  function 
through  education,  supervision,  care  and  by  means  of  well- 
organized,  efficiently-handled  Safety  Organizations,  temporary 
results  were  obtained  and  permanent  good  followed. 

Another  splendid  development  in  the  drive  was  the  human- 
izing of  accidents.  Heretofore  when  an  accident  occurred  to 
an  employee  he  was  visited  by  the  company's  surgeon  and  a 
representative  of  the  claim  department,  written  statements 
taken  and  index  card  made  for  file  and  final  handling,  usually 
in  a  cold  and  with  money  viewpoint,  dealing  mainly,  if  not 
entirely,  with  the  effects  or  results  of  carelessness  or  defective 
equipment.  But  in  the  Safety  Drive  no  accident  was  counted 
except  those  reported  or  reportable  to  the  Interstate  Commerce 
Commission,  and  an  employee  had  to  be  absent  from  work  for 
"more  than  three  days"  to  come  into  that  classification.  So, 
while  the  surgeon  and  claim  department  looked  after  their 
regular  duties  the  safety  representatives  also  looked  into  the 
cases  personally  and  analyzed  the  causes  to  prevent  recurrence, 
and  also  put  into  each  case  a  bit  of  that  kindly  care  and  fellow- 
ship of  service  I  have  just  mentioned.  A  man  in  that  way  was 
not  lost  sight  of  in  the  interval  of  absence  from  work,  and  with 
definite  knowledge  of  his  possible  return  his  expert  and  often 
very  important  place  was  not  filled  by  a  new  and  untried  man 
who  might  be  inefficient  and  wasteful  of  material  and  energy. 


METHODS  OF  CONDUCTING  A  PREVENTION  DRIVE        667 

Accident  Reduction  56  Per  Cent. 

For  the  entire  period  of  the  drive  (October  18-31)  there 
were  2,773  fewer  casualties  than  in  the  same  period  of  1918, 
or  an  average  of  56  per  cent,  accident  reduction  on  all  railroads 
in  the  United  States. 

The  drive  would  have  been  rather  negative  if  it  had  not  been 
fostered  and  managed  by  a  centralized  organization.  The  weak 
and  indifferent  were  strengthened  by  the  constructive  criticism 
and  friendly  help  officially  given  outside  of  their  individual 
roads. 

To  carry  on  a  similar  campaign  or  even  a  general  clean- 
up and  co-ordinated  accident  prevention  work  in  your  great 
branch  of  industry  it  would  be  necessary  to  compel  those  mines 
that  are  unsafe  and  officers  who  are  indifferent  to  place  the 
properties  on  a  practical  standard  of  safety,  just  as  we  in  the 
railroad  Safety  had  to  get  the  railroads  well  organized  before 
undertaking  the  drive.  Some  mines,  like  railroads,  are  not  all 
worked  under  similar  conditions — the  big  ones  are  different 
from  the  small  ones;  localities  and  conditions  vary.  But  you 
can  do  as  we  did — have  certain  standards  of  meetings  and 
reporting  and  handling  the  items. 

Education  for  Safety 

Education  for  safety  can  clearly  elevate  the  mining  industry 
by  making  the  employees'  mental  attitude  one  of  satisfaction 
and  thereby  increasing  efficiency  and  production.  And  from 
my  experience  I  assure  you  it  is  an  undertaking  worth  while, 
for  the  majority  of  casualties  do  not  come  from  big  causes,  and 
80  per  cent,  of  the  accidents  are  preventable.  It  does  not  take 
much  calculating  or  a  great  flight  of  imagination  to  figure  the 
possible  happiness  to  the  men  themselves,  as  well  as  to  the 
loved  ones — the  wives  and  children — of  the  workers  that  may 
be  gained  by  our  every-day,  simple,  helpful  acts  and  words  for 
their  safety  and  physical  welfare.  It  may,  therefore,  be 
summed  up  in  these  few  words :  Educate,  organize,  personally 
and  intensely  supervise,  and  thereby  conquer  carelessness  and 
prevent  accidents  and  distress. 


668         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION 

By  CHARLES  S.  ALLEN,  Secretary  of  the  Wholesale  Coal  Trade 
Association  of  New  York,  Inc. 

The  title  under  which  I  am  to  speak  is  a  rather  formidable 
one,  but  what  I  shall  have  to  say  will  not  be  a  technical  dis- 
cussion of  the  matter.  I  have  come  here  not  to  state  conclu- 
sions, but  the  results  of  certain  investigations  we  have  made 
on  this  subject  and  to  leave  it  to  you  to  draw  the  conclusions. 

I  suppose  in  addressing  a  meeting  of  coal  men  representing 
even  so  wide  a  territory  as  you  probably  do,  you  perhaps  have 
the  same  characteristics  that  I  have  found  among  the  members 
of  our  Association  where  our  territory  is  somewhat  restricted, 
and  it  seems  to  me  the  most  prominently  outstanding  of  those 
characteristics  is  that  of  complacency.  The  coal  man  in  my 
dealings  with  him  has  shown  a  complacency  on  all  occasions 
which  to  me,  in  view  of  what  has  been  done  to  him,  has  been 
somewhat  astounding. 

We  in  New  York  approached  this  oil  as  fuel  proposition  in 
just  that  frame  of  mind.  It  is  true  now  and  then  a  member  of 
the  Association  would  report  to  me  or  some  other  officer  of  the 
Association  that  he  had  lost  a  customer  to  oil.  But  he  shrugged 
his  shoulders  and  apparently  thought  (if  he  did  not  say)  that 
the  woods  were  full  of  others. 

Menace  of  Oil  Now  Realized 

As  time  went  on,  and  events  moved  rather  rapidly,  our  mem- 
bers became  much  more  interested  in  this  subject — more  cus- 
tomers were  lost — until  the  situation  reached  a  stage  that  I 
think  is  very  aptly  described  in  the  current  issue  of  The  Black 
Diamond  on  its  editorial  page,  in  one  or  two  paragraphs,  which 
I  will  take  the  liberty  of  reading  to  you : 

The  fuel  oil  menace  is  a  real  one.  Not  only  has  it  reached 
serious  competitive  proportions  in  the  East,  but  it  is  beginning  to 
undermine  coal  in  the  Central  West. 

The  present  cost  of  producing  coal  and  the  present  price  of  pro- 
ducing fuel  oil  are  reaching  a  point  where  fuel  oil  is  beginning 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  669 

to  get  the  best  of  the  argument,  when  the  cost  of  handling  both 
fuels  is  considered. 

On  another  page  of  The  Black  Diamond  of  this  issue  there 
appears  a  most  interesting  story  of  the  experience  of  a  large 
office  building  in  Chicago.  This  coal  consumer  has  decided  that 
it  is  cheaper  and  manifestly  much  better  to  burn  oil  than  coal. 

This  case  is  not  an  isolated  one,  by  any  means.  The  fuel 
oil  people  are  working  energetically,  aggressively,  not  only  in 
Chicago  and  Eastern  cities,  but  in  the  whole  country,  while  the 
coal  man  sits  dreamily  by. 

A  definite  plan  of  action  should  be  mapped  out  by  the  coal 
industry. 

It  happens  that  the  Association  of  which  I  am  secretary  has 
taken  time  by  the  forelock  and  mapped  out  a  plan,  restricted, 
it  is  true,  by  the  small  number  of  members  in  our  Association, 
but  being  supplemented  daily  by  a  growing  number  of  coal  men 
who  appreciate  the  gravity  of  the  situation  and  the  necessity 
for  supporting  our  program. 

I  shall  later  discuss  the  case  of  oil  burning  referred  to  in  the 
editorial  just  read. 

Our  interest  in  this  subject  in  New  York  City  became  cen- 
tered upon  the  proceedings  taken  by  the  Board  of  Standards  of 
Appeals,  which  is  a  body  of  men  appointed  for  the  purpose  of 
fixing  fire  regulations.  The  Board  held  a  number  of  hearings. 
Preceding  and  contemporaneous  with  those  hearings,  experi- 
ments were  being  conducted  in  the  Singer  Building,  one  of  the 
largest  office  buildings  in  the  city,  with  the  burning  of  oil  as 
fuel.  It  so  happens  that  Mr.  Buxton,  who  is  the  engineer  of 
that  building,  is  the  father  of  the  gentleman  in  charge  of  the 
Fuel  Oil  Division  of  the  Texas  Company,  and  they  had  a  very 
fertile  field  upon  which  to  work  as  an  initial  proposition  in 
furnishing  oil  as  a  fuel  to  an  office  building  on  Manhattan 
Island. 

The  reports  made  on  the  result  of  those  tests  were  entirely 
favorable  to  oil,  and  the  announcement  has  been  made  in  the 
newspapers  time  and  again  that  the  one  unit  which  has  been 
used  as  an  experiment  will  be  increased  until  all  of  the  units  of 
power  production  in  that  plant  have  been  converted  to  oil. 

That  activity  on  the  part  of  the  oil  people  and  the  considera- 
tion of  the  matter  by  the  Board  of  Standards  and  Appeals  re- 
sulted in  a  great  deal  of  newspaper  notority  and  free  adver- 
tising being  given  to  the  oil  game,  samples  of  which  are  these : 


670         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

This  is  from  the  New  York  Evening  Mail  of  October  30, 
1919: 

"Oil  will  replace  coal  in  city  within  five  years,  experts  say. 

"Board  of  Standards  and  Appeals  has  plan  to  make  New 
York  smokeless  and  spotless  and  yet  save  taxpayers  money." 

We  have  had  in  New  York,  in  common  with  other  large 
cities,  profiteering  landlords  and  a  great  deal  of  talk  about 
those  as  well.  Here  is  a  headline: 

"Fair  landlords  evolve  plans  to  cut  expenses  and  keep  rents 
down. 

"Oil-generated  steam  heat  proposed,"  from  a  central  plant. 
Another  headline  reads : 

"Gets  large  oil  contract. 

"Texas  Company  to  supply  General  Chemical  Company  with 
300,000  barrels." 

I  could  give  you  any  number  of  others.  You  perhaps  read 
in  the  papers  a  month  ago  that  the  receiver  of  the  M.,  K.  &  T. 
Railroad  had  made  a  request  to  the  United  States  District 
Court  for  permission  to  enter  into  a  contract  with  the  Mexican 
Petroleum  Corporation,  by  which  contract  the  railroad  com- 
pany was  to  take  15,000,000  barrels  of  oil  over  a  period  of  five 
years,  that  the  oil  company  was  to  lend  to  the  railroad  company 
the  $650,000  necessary  to  convert  its  engines  to  oil  burning, 
that  the  oil  should  be  delivered  to  the  railroad  company  at 
Galveston  at  65  cents  plus  35  cents  per  barrel,  which  latter  sum 
was  to  be  used  as  a  sinking  fund  to  repay  the  advance  of 
$650,000  by  the  oil  company. 

The  Seaboard  Air  Line,  a  railroad  running  south  from  Rich- 
mond and  Portsmouth,  Va.,  to  Jacksonville  and  Tampa,  Fla., 
has  recently  entered  into  a  contract  to  convert  its  motive  power 
to  oil  burning  south  from  Hamlet,  N.  C.,  a  division  point  on  the 
system. 

New  York  Trade  Bestirs  Itself 

We  concluded  that,  with  this  increased  activity  on  the  part 
of  the  oil  people,  the  time  had  come  for  the  coal  people  to  bestir 
themselves,  and  we  called  a  meeting  in  New  York  for  the  8th 
of  October,  which  was  very  largely  attended,  and  as  a  result  of 
that  meeting  a  committee  was  appointed. 

The  next  day  the  committee  met  in  my  office  and,  among 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  671 

other  things,  accepted  the  proffer  of  the  machinery  of  our 
Association  to  gather  together  and  disseminate  such  informa- 
tion as  we  might  be  able  to  put  our  hands  upon,  which  it  was 
hoped  would  at  least  be  encouraging  to  the  coal  man. 

The  preliminary  investigation  had  led  us  to  believe  that 
Providence,  R.  I.,  was  the  plague  spot,  so  to  speak,  for  oil  use, 
and  at  the  committee  meeting  in  my  office,  after  the  Associa- 
tion had  been  asked  to  take  over  this  matter,  one  member  of 
the  committee,  with  the  acquiescence  of  the  other  members, 
asked  me  if  I  would  go  to  Providence  and  make  an  investiga- 
tion of  the  situation  there,  and  if  it  were  found  to  be  as  bad  as 
it  appeared  to  be,  to  come  quickly  back  to  New  York  and  report 
so  that  they  might  make  arrangements  to  get  out  of  the  coal 
business  and  into  something  else. 

Coal  Salesman  Must  Be  Taught 

Well,  I  went  to  Providence  and  conducted  an  investigation. 
We  found  that  what  was  true  in  New  York  was  equally  true  in 
Providence — that  is,  when  oil  was  mentioned  to  a  coal  man,  be 
he  proprietor  or  salesman,  he  promptly  laid  down  and  curled 
up,  very  much  as  would  a  porcupine,  except  that  he  had  no 
quills  to  shoot  back  in  defense.  In  other  words,  he  had  nothing 
to  say. 

I  have  personally  interviewed  at  least  a  hundred  coal  sales- 
men, and  I  have  not  found  one  man  who  knew  of  one  fact  that 
he  could  put  his  hand  upon  in  an  argument  for  coal  as  against 
oil. 

We  found  in  Providence  that  there  were  upward  of  two 
hundred  industrial  plants  equipped  for  burning  oil,  with 
numerous  conversions  going  on  from  day  to  day.  And  what 
was  true  of  Providence  was  likewise  true  of  that  whole  indus- 
trial center. 

That  in  Boston  the  oil  people  were  conducting  a  house-to- 
house  canvass  for  the  purpose  of  converting  users  of  coal  to 
burners  of  oil. 

We  found  that  one  oil  company  had  spent  $25,000,000  on  its 
plant  at  Providence ;  one  oil  company. 

On  the  streets  of  Providence  we  saw  more  fuel  oil  motor 
trucks,  by  two  to  one,  than  coal  wagons. 

We  found  that  in  Providence  there  were  several  oil  burner 


672         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

companies,  and  that  they  were  working  in  the  closest  harmony 
and  co-operation.  The  Aetna  Company  manufactures  a  burner 
suitable  for  heating  residences  or  small  apartment  houses.  The 
Fess  Rotary  Burner  Company,  which  has  been  transplanted 
from  the  Pacific  Coast  to  New  England,  makes  a  burner  some- 
what larger,  suitable  for  small  industrial  plants,  hospitals,  etc. 
The  Hammel  and  the  Best,  and  one  or  two  others,  are  burners 
for  use  in  large  industrial  plants. 

We  found  that  if  a  man  went  into  the  Aetna  place,  for  in- 
stance, to  inquire  about  a  burner  and  his  requirements  were 
such  that  they  could  not  be  met  with  their  equipment,  he  was 
referred  to  the  Fess  or  Hammel  people ;  and  that  same  system 
prevailed  with  the  others. 

Some  Industries  Changing  Back  to  Coal 

Having  gone  that  far  in  Providence,  we  did  not  feel  much 
encouraged,  but  we  stuck  to  the  job,  and  found  some  instances 
that  were  very  encouraging. 

For  example,  we  found  one  place  where  there  were  ten 
boilers.  The  oil  man  came  along  and  persuaded  those  people  to 
permit  them  to  change  six  of  them  to  burning  oil.  They  did  so. 
All  of  the  work  of  installation  and  use  was  under  the  direct 
supervision  of  the  experts  of  the  oil  company.  It  happened 
that  this  plant  kept  a  very  close  account  of  the  fuel  cost  and 
performance,  both  coal  and  oil.  (It  is  remarkable  how  few 
industries,  with  their  complicated  and  extensive  cost  systems, 
know  what  it  is  costing  them  to  burn  coal  or  oil.) 

At  this  place  they  tried  out  the  six  oil  burners.  At  the  end  of 
several  months  of  test  operation,  the  results  were  so  unsatis- 
factory that  they  took  them  out  and  replaced  them  with  coal- 
burning  equipment  and  the  oil  company  was  told  that  it  would 
be  sued  for  damages  because  of  misrepresentations  made  unless 
it  made  good  the  loss,  and  I  am  told  the  oil  company  paid  for 
the  reinstallation  of  the  coal-burning  apparatus  in  the  sum  of 
about  $25,000. 

Another  large  industry  had  two  sets  of  boilers,  four  at  one 
end  and  three  at  the  other  end  of  an  immense  plant.  The  oil 
people  represented  to  them  that  they  could  save  money  and 
increase  their  efficiency  by  converting  to  oil;  told  them  they 
would  not  need  seven  boilers,  that  all  they  needed  was  three 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  673 

and  they  could  scrap  the  other  four.  They  consented  to  put  in 
three  oil-burning  units  with  the  best  apparatus  that  could  be 
purchased,  regardless  of  expense;  scrapped  the  four  other 
boilers,  and  went  ahead  for  several  months  until  they  saw  they 
were  not  getting  results,  and  finally  had  to  go  out  into  the  yard 
and  gather  together  the  scraps  of  the  four  old  coal  burners  and 
put  them  back  into  use. 

The  most  interesting  information  we  gained  was  the  result 
of  investigations  made  by  a  gentleman  who  has  had  years  of 
experience  in  burning  oil  in  California  and  Arizona  and  had 
acted  as  an  expert  for  the  Government  in  oil  burning  and  had 
finally  gone  to  Fall  River  to  be  chief  engineer  for  a  large  plant 
there. 

A  Questionable  Economy 

He  spent  $5,000  in  investigating  the  subject  of  oil  burning 
in  the  East.  My  recollection  is,  they  had  twenty-seven  boilers 
in  their  plant  and  the  result  of  his  investigation,  in  a  word,  was 
that  while  there  was  a  saving,  on  the  face,  in  burning  oil  in 
their  plant,  it  was  so  small  that  it  would  take  them  twenty-four 
years  to  repay  the  cost  of  installing  the  oil-burning  equipment. 
They  continue  on  coal. 

Another  concern  in  Trenton,  N.  J.,  made  very  exhaustive 
tests  and  found  that  there  was  nothing  to  be  gained  in  burning 
oil  even  at  three  cents  per  gallon,  compared  to  coal  at  $5  per 
net  ton.  Similar  investigations  have  been  made  by  Thomas  A. 
Edison's  plants  around  Orange,  N.  J.;  by  the  Public  Service 
Corporation  of  New  Jersey,  which  is  the  company  that  fur- 
nishes the  electricity  for  the  lighting  and  street  cars,  urban  and 
interurban,  for  a  large  part  of  the  State;  by  the  Hartford 
Electric  Company,  of  Hartford,  Conn.,  and  the  Amoskeag  Mills 
of  Manchester,  N.  H.,  and  all  decided  against  burning  oil — the 
details  of  which  I  have  here,  but  will  not  burden  you  with  at 
this  time. 

So  with  the  result  of  that  investigation  as  a  preliminary,  I 
returned  to  New  York  and  reported  to  our  people,  and  they 
were  sufficiently  heartened  to  authorize  me  to  go  ahead  to  con- 
duct further  investigations  to  gather  material  to  enlighten  the 
coal  man  on  the  subject. 

Our  first  step  was  to  engage  a  combustion  engineer,  who  is 


674         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  head  of  the  Engineering  Department  of  one  of  the  great 
universities  in  the  East.  He  has  taken  over  this  matter  for  us, 
as  he  expressed  it,  with  an  absolutely  open  mind,  to  go  to  the 
bottom  of  the  whole  subject  and  to  give  us  a  report,  which  we 
expect  to  have  within  a  very  few  days. 

I  have  discussed  his  preliminary  report  with  him  and  I  can 
assure  you  that  when  his  final  report  is  made  it  will  be  entirely 
satisfactory  and  will  contain  much  valuable  material  that  we 
can  make  use  of,  as  well  as  to  have  the  privilege  of  consulting 
him  as  occasion  may  arise. 

Now,  gentlemen,  I  want  to  say  a  word  to  you  about  the  possi- 
bilities of  fuel  oil  competition.  A  great  many  coal  people  think 
that  the  menace  of  oil  is  confined  to  the  Atlantic  and  Gulf  sea- 
board. While  that  may  be  true  for  the  moment,  it  is  not  true 
for  all  time.  The  factor  which  will  determine  the  use  of  oil  as 
against  coal  is  whether  or  not  it  may  be  transported  by  water, 
and  consequently  any  place  that  may  be  reached  by  a  boat  or 
barge  is  as  ready  a  market  for  fuel  oiJ  as  is  Providence  or  New 
York  or  Boston  or  Galveston,  the  only  difference  being  the 
slight  variation  in  water  freights. 

Now,  having  that  in  mind,  let  me  call  your  attention  to  the 
geography  of  the  situation  for  a  moment.  Of  course,  you  have 
all  of  the  principal  manufacturing  concerns  of  the  New  England 
States  practically  on  the  seaboard;  the  whole  length  of  Long 
Island  you  have  the  Hudson  River,  and  if  that,  the  Erie  Canal 
and  all  the  important  towns  located  on  those  waterways,  such 
as  Newburgh,  Poughkeepsie,  Albany,  Troy,  Amsterdam,  Syra- 
cuse, Rochester,  Utica,  Buffalo;  if  Buffalo,  Lake  Erie,  and  if 
Lake  Erie,  why  not  Lake  Huron,  Lake  Michigan  and  Lake 
Superior,  with  Cleveland,  Toledo,  Detroit,  Chicago,  Milwaukee 
and  even  Duluth ;  if  the  Atlantic  Ocean  and  the  Hudson  River, 
why  not  the  Potomac,  Chesapeake  Bay,  the  James  River,  the 
Savannah,  the  Alabama,  the  Mississippi,  the  Ohio,  the  Tennes- 
see and  the  Missouri  ? 


Transportation  Problems  Involved 

When  you  examine  the  map  you  will  find  that  practically  all 
of  the  large  industrial  centers  of  the  country  are  accessible  to 
oil  deliveries  by  water,  except  St.  Paul,  Minneapolis,  Omaha, 
Kansas  City,  Atlanta,  Denver  and  two  or  three  others. 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  675 

A  compilation  of  the  population  of  these  centers  accessible 
by  water  shows  a  total  of  more  than  30  per  cent,  of  the  total 
population  and  certainly  75  to  80  per  cent,  of  the  industrial 
activity  of  the  country. 

As  to  the  supply  of  oil,  the  menace  to  the  coal  people  is  not 
from  the  oil  produced  in  the  United  States,  because,  as  you 
know,  it  is  largely  of  a  paraffin  base  and  too  valuable  to  use  for 
fuel  purposes,  except  the  residue,  which  results  from  the  dis- 
tillation of  the  other  more  valuable  constituents,  and  that  resi- 
due is  not  desirable  as  a  fuel  because  of  the  fact  that  it  has  a 
very  low  flash  point — that  is,  the  temperature  at  which  it  gives 
off  inflammable  gases. 

Consequently,  the  danger  is  from  Mexican  oil,  and  since  the 
signing  of  the  armistice  and  the  withdrawal  of  our  fleet  and  the 
termination  of  other  war  activities  in  which  oil  was  used  in 
Europe  there  has  been  a  great  quantity  of  that  oil  thrown  on 
the  market  in  this  country. 

Extent  of  Imports  from  Mexico 

In  the  year  1918  there  were  brought  into  this  country  in 
round  figures  32,000,000  barrels  of  crude  oil  from  Mexico,  the 
equivalent  of  about  8,000,000  tons  of  coal.  In  the  month  of 
July,  1919,  there  were  exported  from  Mexico  to  the  United 
States  4,881,446  barrels  of  crude  oil.  That  would  be  at  the  rate 
of  45,500,000  barrels  in  one  year — an  increase  of  11,600,000 
barrels  over  last  year.  This  oil,  as  you  know,  of  course,  comes 
into  this  country  duty  free.  You  may  know  that  one  Mexican 
well  is  now  and  has  been  for  several  years  producing  300,000 
barrels  of  oil  a  day. 

The  oil  people  have  many  millions  of  dollars  which  they  have 
been  spending  and  will  continue  to  spend  in  their  campaign  for 
educating  the  people  to  the  alleged  advantages  of  using  oil  as  a 
fuel.  The  coal  people  are  not  so  fortunately  situated  in  that 
respect. 

I  would  like  to  read  to  you  an  extract  from  an  address  that 
was  delivered  by  Mr.  A.  L.  Wilson,  who  is  superintendent  of 
the  power  plant  of  the  Bayonne  station  of  the  Standard  Oil 
Company.  Mr.  Wilson  addressed  a  meeting  of  engineers  at 
Newark,  N.  J.,  on  the  22nd  of  October.  We  heard  he  was  going 
to  speak,  had  a  report  of  his  speech  made  and  sent  him  a  copy 


676         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

with  a  letter  in  which  we  told  him  that  we  expected  to  use  it, 
and  that  if  it  was  not  a  correct  report  we  would  like  to  have 
him  correct  and  return  it  to  us  arid  that  unless  we  heard 
from  him  we  would  assume  it  was  correct  and  make  use  of  it 
accordingly. 

What  an  Oil  Man  Says 

We  have  not  heard  from  Mr.  Wilson,  and  assume,  therefore, 
that  the  copy  we  have  is  a  correct  one,  and  it  is  from  that  I  will 
quote  on  the  point  of  what  may  be  expected  in  the  way  of 
increased  activity  in  the  oil : 

Now  there  is  probably  something  else  that  is  bothering  you, 
and  it  is  bothering  a  great  number  of  the  engineers  today;  is  it 
going  to  pay  us  to  go  on  oil?  We  know  that  the  coal  barons  are 
going  the  limit  on  the  thing,  they  are  getting  all  they  can  out  of 
it,  but  can  you  believe  that  the  combined  oil  interests  are  any 
weaker  than  the  coal  people?  Now  just  think  of  that  for  a,  minute. 
You  have  no  idea  of  the  number  of  wells  today  that  have  been 
opened  and  capped,  that  are  not  being  handled  because  there  is 
a  sufficient  supply  of  lighter  oils  on  the  market  that  it  pays 
better  to  handle.  There  is  more  behind  this  oil  game  than  any 
of  us  know  anything  about. 

Oil  Supply  Monopolized 

Further  on  that  proposition  I  would  like  to  read  you  from  a 
newspaper  clipping  which  says : 

FIGHT  TO  CORNER  OIL  IN  FRANCE 

STANDARD  AND  ROYAL  DUTCH  COMPANIES  SEE  SUBSTITUTE  OP 
CRUDE  PRODUCT  FOR  COAL 

(By  Kenneth  Latour,  Universal  Service  Staff  Correspondent) 

Paris,  Oct.  25. — A  secret  trade  duel  has  been  opened  between 
President  Bedford  of  the  Standard  Oil  Company  and  President 
Deterding  of  the  Royal  Dutch  Company,  the  issue  of  which  is 
the  monopoly  of  the  French  oil  market. 

Now,  gentlemen,  you  may  say  that  you  are  not  interested  in 
the  French  oil  market,  but  here  is  the  connection  I  am  trying  to 
establish,  and  this  is  the  thought  that  you  should  give  to  your 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  677 

consumer  of  coal:  There  are  today  between  six  and  seven 
thousand  companies  producing  bituminous  coal  in  the  United 
States.  I  believe  that  any  man  in  this  audience  can  say  that 
there  is  the  keenest  competition  between  these  producers  of 
coal. 

Now,  when  your  man  goes  on  oil,  what  is  he  doing?  Putting 
his  head  into  a  noose,  the  other  end  of  the  rope  being  held  by 
five  or  six  large  oil  companies,  and  if  anybody  in  this  audience 
or  anywhere  else  believes  that  there  is  competition  in  the  oil 
business  today,  let  him  get  an  automobile  and  then  buy  a  little 
gasoline. 


A  Typical  Oil  Contract 

The  contract  that  is  presented  to  business  men  by  oil  com- 
panies is  the  most  remarkable  document  I  have  ever  seen.  I 
have  here  a  typical  oil  contract.  It  is  too  long  to  read,  but  I 
will  quote  briefly  from  it : 

Said  price  is  based  on  rates  and  conditions  of  taxation  and 
other  governmental  charges  actually  payable  at  the  date  hereof. 
In  case  the  seller  shall  hereafter  be  required  to  pay  any  new, 
additional,  or  increased  taxes,  dues,  rentals,  royalties,  or  charges 
of  any  nature,  however  the  same  may  be  collected  and  by  what- 
soever name  they  may  be  known  and  whether  or  not  they  become 
payable  pursuant  to  legislative  or  other  action  heretofore  or  here- 
after taken  in  the  Republic  of  Mexico  or  United  States  of  Amer- 
ica, by  any  legal  or  de  facto  governmental  authority  or  person 
or  body  exercising  actual  power,  which  directly  or  indirectly 
increases  the  cost  of  producing,  handling,  exporting  from  Mexico, 
importing  into  the  United  States,  treating  or  transporting  the 
petroleum  covered  hereby,  the  seller  shall  be  entitled,  upon  noti- 
fication to  the  purchaser,  to  advance  the  price  of  such  petroleum 
to  the  extent  of  one-half  the  amount  of  the  new  or  additional 
taxes,  dues,  rentals,  royalties,  or  charges  thus  payable. 

Purchaser  agrees  that  the  roads  and  connections  between  the 
public  highway  and  its  receiving  tanks  will  be  kept  in  good  and 
suitable  condition  at  all  times,  and  open  so  as  to  permit  the 
passage  of  the  seller's  loaded  trucks  without  difficulty  or  delay; 
*  *  *  for  all  delays  to  seller's  trucks  caused  by  non-compliance 
with  the  foregoing  provisions,  or  otherwise  caused  by  the  pur- 
chaser, the  purchaser  shall  pay  demurrage  at  the  rate  of  $3.00 
per  quarter  hour  or  fraction  thereof. 


678         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

"Force  Majeure"  Clause 

The  seller  shall  not  be  responsible  for  any  delay,  failure  or 
omission  in  the  performance  of  any  of  the  stipulations,  obliga- 
tions and  conditions  herein  contained  caused  by  strikes,  labor 
disturbances,  fire,  epidemics,  earthquakes,  wars,  riot,  internal 
disorders,  insurrections,  revolutions,  hostilities,  restraints  of 
princes,  rulers,  or  peoples,  blockades,  the  expropriation,  taking, 
occupation  or  confiscation  of  property  whether  direct  or  indirect, 
or  interference  in  its  holding,  administration  or  operation  of  its 
oil  or  other  properties  by  civil  or  military  authorities,  or  by 
those  having  or  purporting  to  exercise  actual  control,  whether 
such  expropriation,  taking,  occupation,  confiscation  or  inter- 
ference be  lawful  or  otherwise,  and  whether  effected  or  purport- 
ing to  be  effected  under  color  of  or  pursuant  to  any  constitution, 
decree  or  law  established  pursuant  to  legal  or  ostensible  authority 
or  otherwise  or  by  the  operation  of  any  such  constitution,  decree 
or  law,  the  commandeering  of  vessels  or  other  property,  force 
of  any  kind,  floods,  storms,  perils  of  the  sea,  accidents,  explo- 
sions, quarantine,  accident  to  or  stoppage  of  steamers  transport- 
ing the  petroleum,  stoppage  of  machinery  or  pipe  lines,  cessation 
or  diminution  in  production  of  seller's  wells,  barratry  of  masters 
or  crews  of  seller's  ships,  act  of  God,  or  any  cause  whatsoever 
not  within  its  control,  whether  of  the  class  of  causes  hereinbefore 
enumerated  or  not,  and  whether  or  not  any  such  contingency 
mentioned  in  this  article  shall  rise  or  any  of  such  causes  shall 
become  operative  in  the  Republic  of  Mexico  from  which  the 
'  petroleum  supply  of  the  seller  is  derived,  or  upon  the  high  seas, 
or  in  the  United  States  of  America,  or  elsewhere.  In  any  such 
case  the  operation  of  this  contract,  so  far  as  necessary,  shall  be 
suspended  during  the  period  of  any  such  delay  without  any 
responsibility  for  damages  on  account  thereof,  it  being  under- 
stood that  the  cause  of  such  delay  shall  be  remedied  if  possible, 
with  all  dispatch,  and  the  performance  of  this  contract  resumed 
at  the  earliest  practicable  time  after  cessation  of  such  inter- 
ruption unless  this  contract  be  terminated,  as  hereinafter  pro- 
vided. 


Sign  in  Haste,  Repent  at  Leisure 

Now,  as  astonishing  as  it  may  seem  to  you,  any  number  of 
people  have  signed  that  contract.  Why  ?  Because  the  oil  idea 
was  probably  sold  to  them  before  they  ever  saw  the  contract 
and  when  the  man  became  inoculated  with  the  virus  of  this  oil- 
burning  "fever"  which  seems  to  be  taking  possession  of  some 
of  them  and  had  gotten  to  the  point  where  he  said  "Oil  and 
nothing  else  for  me,"  then  the  contract  was  handed  to  him  and 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  679 

the  dotted  line  was  pointed  to  and  he  was  told  to  "sign  here." 
That  is  the  only  way  any  sane  man  would  have  signed  it,  in  my 
opinion. 

It  happens  that  Mr.  Wilson  and  several  other  oil  advocates 
have  furnished  us  with  a  good  deal  of  material.  A  gentleman 
who  is  a  combustion  engineer  of  wide  experience  in  the  East 
and  on  the  Pacific  Coast  and  in  Canada  in  both  the  coal  and  oil 
matters,  now  employed  by  one  of  the  larger  oil-burning  equip- 
ment manufacturers,  addressed  a  meeting  of  engineers  at 
Providence,  R.  I.,  not  long  ago,  and  I  will  read  you  one  or  two 
things  that  he  said : 

In  deciding  on  the  question  of  installing  oil  in  the  place  of 
coaly  the  results  obtained  in  one  plant  cannot  be  used  directly  for 
comparison  with  another  plant;  data  is  not  transferable,  as  each 
plant  presents  engineering  problems  of  its  own. 

The  change  should  only  be  undertaken  after  consulting  with 
competent  authorities. 

The  purchaser  should  obtain  a  contract  giving  guarantees  ex- 
tending over  a  period  of  years. 

Facts  to  Be  Determined 

In  determining  the  advisability  of  change,  it  is  first  necessary 
to  determine: 

1.  What  results  are  being  obtained  with  coal. 

2.  The  age  and  condition  of  the  boilers  in  the  plant. 

3.  Condition  of  the  settings. 

4.  And  other  pertinent  facts.    Wise  buyers  now  purchase  both 
coal  and  oil  on  a  heat  unit  basis. 

To  get  accurate  estimates  the  efficiency  of  the  plant  should  be 
determined  for  six  months  and  then,  when  the  facts  are  known, 
all  cards  should  be  laid  on  the  table  for  the  information  of  the 
combustion  engineer  who  is  to  recommend  in  connection  with  oil 
burning. 

The  important  thing  to  determine  is  the  average  evaporation 
throughout  the  year,  not  the  maximum  that  can  be  obtained  only 
under  ideal  test  conditions. 

Results  obtained  from  short-time  tests  should  be  discounted. 

It  is  useless  for  a  salesman  to  state  what  he  can  save,  unless 
he  knows  the  whole  story. 

Injury  to  the  boiler  does  not  always  show  up  at  once. 

Oil  burning  looks  simple,  but  there  are  a  surprising  number  of 
kinks  in  installing  and  running. 

Many  guarantees  made  in  connection  with  boiler  operation  are 
not  worth  the  paper  that  they  are  written  on. 


680         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  salesman  is  rather  prone  to  make  high  guarantees,  but 
the  cautious  engineer  dislikes  to  do  so,  as  he  is  not  given  to 
gambling. 

Excessively  high  guarantees  are  seldom  lived  up  to  and  it  is 
well  not  to  be  influenced  too  highly  by  enthusiastic  salesmen. 

The  regulation  of  the  oil  is  a  most  important  feature,  and  if 
this  is  not  done  carefully,  ivaste  occurs. 

Automatic  regulation  is  now  essential;  improvements  in  such 
automatic  regulations  are  now  under  way  and  these  improve- 
ments tend  to  make  possible  the  highest  efficiency;  but  at  present 
it  is  impossible  to  state  just  what  will  be  done,  for  the  control 
will  undoubtedly  be  determined  by  the  load  and  this  automatic 
regulation,  if  perfected,  will  be  the  biggest  feature  in  saving 
money. 

Another  Form  of  Contract 

Now,  gentlemen,  I  saw  one  contract  that  was  made  for  a 
period  of  five  years  and  that  was  the  nearest  approach  that  I 
saw  to  an  oil  contract  naming  a  price  for  an  extended  period, 
and  that  named  a  price  for  an  initial  period  and  provided  that 
all  prices  in  the  following  periods  of  six  months  should  be  fixed 
with  relation  to  the  price  of  coal  in  the  immediately  preceding 
six  months. 

This  oil  engineer,  speaking  to  a  body  of  engineers,  said.: 

The  price  is  seldom  fixed,  but  is  generally  governed  by  the  price 
of  coal  and  based  on  a  comparison  with  future  coal  prices.  While 
the  prices  are  fluctuating,  it  is  probable  that  oil  will  always  be 
cheaper  than  coal.  The  price  will  depend  largely  on  facilities 
for  delivery.  Where  it  can  be  delivered  directly  from  a  boat,  it 
will  be  the  cheapest;  rail  delivery  is  more  expensive. 

I  could  go  on  and  quote  further  along  this  line,  but  I  will  not 
weary  you  with  these  details.  Let  me  say  that  this  information 
is  on  file  in  our  office  and  will  be  placed  at  your  disposal  on 
request. 

Before  closing,  however,  I  want  to  say  a  word  about  some 
of  the  claims  made  by  the  oil  people  with  respect  to  the  com- 
parative cost  of  burning  oil  and  coal. 

Some  Comparative  Costs 

Recent  prices  of  oil  run  all  the  way  from  65  cents,  at  Gal- 
veston,  to  $2.625  at  Chicago,  with  New  Orleans,  77i/2  cents; 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  681 

Trenton,  N.  J.,  $1.26;  Meridian,  Miss.,  $1.535,  and  Providence, 
R.  I.,  from  93  cents  to  $1.55  per  barrel,  depending  upon  the 
date  of  the  contract  under  which  deliveries  are  made,  and  in 
some  instances  this  wide  variation  in  price  is  found  at  a  single 
plant,  where  different  contracts  are  in  force. 

The  claim  for  oil  is  that  four  barrels  will  equal  one  ton  of 
coal;  but  investigation  shows  that  five  barrels  would  be  about 
the  minimum,  so  that  while  oil  at  $1.50  per  barrel  is,  according 
to  the  claim  of  the  oil  people,  equivalent  to  $6.00  coal,  many 
users  say  it  should  be  at  least  $7.50  coal  and  in  many  cases 
more. 

For  instance,  at  Brown  University,  in  Providence,  Professor 
Kenerson  estimates  that  his  present  contract  for  oil  at  $1.47 
per  barrel  is  equivalent  to  about  $9.00  coal,  and  if  the  price  is 
raised  to  $2.50,  as  he  expects  it  will  be,  the  equivalent  will  be 
$14.00  coal. 

An  Example  of  Exaggerated  Claims 

As  an  example  of  the  exaggerated  claims  made  for  oil,  which 
upon  analysis  are  disproven  on  their  face,  I  want  to  discuss  for 
a  moment  the  instance  referred  to  in  The  Black  Diamond 
editorial  from  which  I  read  at  the  outset : 

This  report  uses  oil  with  a  B.  T.  U.  basis  of  19,000  and 
figures  that  at  5  cents  per  gallon  the  net  B.  T.  U.  produced  per 
1  cent  of  cost  for  fuel  (80  per  cent,  efficiency  in  combustion) 
would  be  22,800 ;  compared  to  coal  with  10,000  B.  T.  U.  at  $5.00 
per  net  ton  (at  60  per  cent,  efficiency) ,  making  21,816  effective 
B.  T.  U.  per  1  cent  of  cost;  showing  about  41/2  per  cent,  in- 
creased efficiency  for  the  oil  above  coal,  with  no  allowance  made 
for  the  3  to  5  per  cent,  of  steam  used  for  atomizing  the  oil  so 
that  it  may  be  properly  burned. 

If,  however,  we  take  figures  which  are  more  nearly  correct 
as  a  basis  for  the  calculation,  an  entirely  different  result  is 
produced. 

The  oil  companies  claim  only  about  18,200  B.  T.  U.  per  pound 
for  fuel  oil.  The  gentleman  making  the  comparison  admits  the 
oil  costs  him  6*4  cents  per  gallon.  Substituting  these  two 
factors  for  those  previously  quoted  but  otherwise  using  the 
same  figures,  we  find  that  the  net  efficiency  produced  is  17,472 
B.  T.  U.  for  oil  per  1  cent  of  cost. 


682         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

If  we  take,  instead  of  $5.00  per  net  ton  for  coal,  $4.65  the 
cost  of  coal  now  in  the  bins  at  this  building,  using  the  other 
factors  (though  10,000  B.  T.  U.  for  coal  is  very  low,  likewise 
60  per  cent,  efficiency),  we  find  that  the  result  is  25,806  B.  T.  U. 
per  1  cent  of  cost  for  coal,  or  an  increased  efficiency  for  coal 
over  oil  of  47.0  per  cent. 

Even  accepting  the  figure  for  coal  on  basis  of  $5.00  per  ton 
we  have,  according  to  the  gentleman's  calculation,  21,816 
B.  T.  U.  per  1  cent  of  cost  as  against  17,472  B.  T.  U.  per  1  cent 
of  cost  for  oil,  on  basis  of  18,200  B.  T.  U.  per  pound  (which  is 
the  correct  figure),  or  a  difference  in  favor  of  coal  of  4,344 
B.  T.  U.,  which  equals  24.8  per  cent,  increase  in  favor  of  coal 
as  against  oil. 

What  has  happened  in  the  East  is  that  the  oil  salesman  has 
influenced  the  man  who  was  disgruntled  by  the  fact  that  he  was 
unable  to  get  the  coal,  has  sold  him  the  oil  idea  and  then  gotten 
him  to  sign  the  oil  contract. 


Must  Fight  the  Devil  with  Fire 

The  oil  companies  do  not  generally  employ  ordinary  sales- 
men, but  combustion  engineers,  who  go  into  a  plant  and  see 
that  the  oil  is  burned  under  the  most  favorable  conditions. 
The  coal  salesman  must  be  educated  to  dwell  upon  the  more 
efficient  burning  of  coal  as  well  as  the  disadvantage  of  oil 
burning,  to  meet  the  kind  of  competition  the  oil  people  are 
putting  up.  It  is  that  work  which  we  have  undertaken  and 
which  I  have  .endeavored  to  outline  to  you  here.  Briefly  stated, 
we  want  to  gather  all  information  possible  on  the  two  propo- 
sitions, (1)  more  efficient  burning  of  coal  and  (2)  the  disad- 
vantages attending  the  burning  of  oil ;  and  to  disseminate  it  to 
the  trade. 

The  subject,  however,  has  many  complexities  and  it  is  diffi- 
cult to  adequately  cover  it  by  the  written  word.  To  meet  this 
situation  we  expect  to  call  meetings  of  coal  salesmen  in  the 
more  important  centers,  and  have  present  at  those  meetings 
men  who  have  informed  themselves  on  the  subject  and  who 
will  transmit  their  information  by  word  of  mouth  to  the  men 
in  the  field,  who  come  in  direct  contact  with  this  menace  to  the 
trade. 


COAL  VERSUS  OIL  IN  POWER  PRODUCTION  683 

From  the  investigation  I  have  made,  it  looks  to  me  like  a 
fight  and  a  good  stiff  one,  and  in  the  limited  capacity  of  our 
membership  in  New  York,  with  such  assistance  as  is  given  us, 
we  intend  to  continue  the  fight  as  long  as  we  have  anything  to 
fight  with  and  to  fight  about.  Thank  you.  [Applause.] 


684         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


WHAT  IS  THE  CAUSE  OF  THE  PRESENT  LABOR 
DISCONTENT? 

Address  by  JAMES  TAYLOR,  Special  Mining  Investigator  of  Illinois 

The  spirit  of  American  civilization  is  immediately  progress- 
ing. The  increase  of  our  population,  the  springing  up  of  new 
cities  and  the  growth  of  old  ones,  the  extension  of  our  railway 
.and  telegraph  systems,  the  increase  of  our  agriculture,  manu- 
facturing and  mining  products,  the  development  of  our  natural 
resources,  the  accumulation  of  our  national  wealth — all  these 
are  simply  enormous.  Such  is  the  progress  of  invention  and 
the  increase  of  knowledge,  and  such  is  the  rapidity  with  which 
important  changes  jostle  each  other,  that  years  seem  like  gen- 
erations. 

In  the  midst  of  all  this  progress  the  workingman  feels  that 
he  is  practically  standing  still.  His  wants  are  increasing  with 
his  intelligence,  but  there  is  no  corresponding  increase  in  his 
means.  We  hear  it  often  said  and  often  denied  that  while  the 
rich  are  growing  richer  the  poor  are  growing  poorer.  The  poor 
are  growing  poorer  in  the  sense  that  their  wages  buy  less  of 
the  necessaries  of  life  and  that  they  are  rated  lower  on  the  tax 
list ;  it  is  also  true  in  the  sense  that  there  is  a  greater  disparity 
now  between  the  workingman's  income  and  his  wants  than  ever 
before,  and  that  is  the  only  sense  worth  considering  in  this 
connection. 

What  is  the  cause  of  the  discontent  among  the  laboring 
class  ?  To  some  it  seems  causeless,  or  at  least  without  excuse, 
because  workingmen  are  now  better  fed,  better  clothed,  better 
housed  than  ever  before,  while  many  workingmen  believe  that 
their  condition  is  growing  constantly  worse.  Whether  the  in- 
dustrial classes  are  any  happier  now  than  they  were  a  half 
century  ago  may  be  doubted,  but  beyond  question  their  condi- 
tion is  improved. 

No  doubt  the  condition  of  the  workingman  has  improved, 
but  it  by  no  means  follows  that  he  should  be  any  better  con- 
tented. There  has  been  a  change  for  the  better  in  the  circum- 
stances of  workingmen,  but  there  has  been  a  still  greater 


WHAT  IS  THE  CAUSE  OF  LABOR  DISCONTENT?  685 

change  in  the  men  themselves,  which  is  the  secret  of  increasing 
popular  discontent  amid  improving  conditions. 

Laborers  More  Intelligent 

In  considering  how  great  has  been  this  change  in  working- 
men,  mark  the  increase  of  popular  intelligence  during  the  past 
century.  For  thousands  of  years  the  Sun  of  Knowledge  was 
below  the  world's  horizon  and  only  the  very  top  of  the  social 
pyramid  could  catch  his  beams.  The  invention  of  printing  was 
the  world's  sunrise  which  drove  the  black  shadow  well  down 
the  sides  of  the  pyramid,  but  left  the  broad  lower  strata  of 
society  still  wrapped  in  the  darkness  of  ignorance.  There  has 
occurred  in  our  own  times  an  event,  scarcely  less  important  to 
the  world  than  the  invention  of  printing  itself,  which  has  lifted 
the  sun  high  in  the  heavens  and  flooded  the  very  foundations 
of  society  with  light.  I  refer  to  the  successful  application  of 
electricity  to  the  printing  press.  Few  appreciate  the  tremen- 
dous significance  of  this  event.  It  meant  the  enlightenment  of 
the  many  for  the  first  time  in  the  world's  history. 

Add  to  a  man's  knowledge  and  you  enlarge  the  world  in 
which  he  lives;  he  sees  a  wider  horizon;  his  future  contains 
greater  possibilities;  he  becomes  conscious  of  new  wants  and 
higher  aspirations,  which,  if  they  cannot  be  satisfied,  naturally 
breed  discontent. 

Popular  power  makes  popular  intelligence  a  necessity ;  popu- 
lar intelligence  makes  the  multiplication  of  popular  wants  in- 
evitable ;  and  the  multiplication  of  popular  wants,  if  more  rapid 
than  the  improvements  of  the  popular  condition,  necessarily 
produces  popular  discontent.  It  is  quite  too  late  for  us  to  turn 
back.  The  multitude  have  already  tasted  of  the  fruit  of  the 
tree  of  knowledge  of  good  and  evil  and  have  become  aware  of 
the  nakedness.  The  supplies  which  cover  the  bare  necessities 
of  life  are  mere  fig  leaves.  The  workingmen  will  never  be 
satisfied  until  their  wants  are  supplied  with  the  fullness  of 
modern  civilization. 

The  average  workingman  two  or  three  generations  ago 
would  no  doubt  have  been  well  contented  with  the  hours,  wages, 
food,  lodging  and  clothes  of  the  average  workingman  today,  but 
during  the  nineteenth  century  public  schools,  public  libraries, 
art  galleries,  museums,  expositions,  public  parks,  newspapers — 
all  have  become  common. 


686         PKOCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Advertising,  which  is  the  art  of  making  people  want  things, 
appeals  to  all  classes  alike.  There  has  been  a  wonderful  level- 
ing up  of  the  "common"  people.  Once  great  men  were  gods, 
and  slaves  were  less  human.  Now  all  alike  are  men,  having 
much  the  same  wants  and  quite  the  same  rights.  The  growth 
of  individualism,  the  equality  of  all  men  before  the  law  have 
suggested  the  ideas  of  equality  of  condition  and  made  the  work- 
ingmen  feel  that  they  are  as  capable  of  enjoying  the  good 
things  of  life  as  their  employers.  All  these  have  contributed 
powerfully  to  increase  the  intelligence  and  wants  of  the  work- 
ingman,  and  the  resulting  elevation  of  the  standard  of  living 
has  made  a  home,  a  table,  a  coat,  seem  almost  intolerable  which 
once  would  have  been  deemed  comfortable  and  even  luxurious. 

Labor  Conditions  Changed 

The  conditions  under  which  he  works  are  radically  different 
from  what  they  were  a  hundred  years  ago.  Profound  economic 
changes  have  attended  the  transition  in  the  world's  methods  of 
production  and  distribution  which  has  taken  place  during  this 
century,  and  more  especially  the  past  25  or  30  years.  It  is  to 
this  source  we  must  look  for  some  of  the  principal  causes  of  the 
popular  discontent  which  has  been  so  pronounced  ever  since  the 
^commencement  of  industrial  affairs. 

Jn  the  "age  of  homespun"  industry  was  individual;  it  has 
now  become  organized.  This  organization  first  extended  from 
the  home  to  the  work  shop.  Soon  the  work  shop  became  the 
part  of  a  large  system,  including  in  its  organization  the  town, 
the  province  or  region,  then  the  whole  country,  and  now  we 
have  entered  on  the  last  great  stage,  viz:  that  of  organizing 
the  industries  of  the  world. 

Each  new  stage  in  this  development  has  necessarily  dis- 
turbed industry  and  required  a  more  or  less  extended  readjust- 
ment of  labor.  Every  great  labor-saving  invention  has  of 
course  thrown  thousands  out  of  employment,  though  every  such 
mechanical  triumph  has  ultimately  given  employment  to  many 
for  everyone  that  it  has  robbed  of  work. 

Value  of  Organization 

The  only  basis  upon  which  any  permanent  peaceful  relation 
between  labor  and  capital  can  be  established  is  the  equality  of 


WHAT  IS  THE  CAUSE  OF  LABOR  DISCONTENT?  687 

organized  representation.  The  first  and  vital,  nay,  indispen- 
sable, condition  of  such  a  relation  is  the  unqualified  recognition 
by  both  parties  of  the  right  of  organized  action  and  the  full 
recognition  of  the  accredited  representative  of  such  organiza- 
tions. There  should  be  a  getting  together  of  the  accredited 
representatives  of  the  largest  bodies  of  organized  capital  and 
of  organized  labor  for  the  purpose  of  devising  a  policy  by 
which  the  natural  differences  between  capital  and  labor  may  be 
settled  on  economic  terms  without  recourse  to  the  methods  of 
war. 

Ever  since  the  dawn  of  the  wages  system  this  has  been  a 
serious  problem  in  industry.  Employers  have  been  profoundly 
impressed  with  the  fact  that  they  were  responsible  for  the 
success  of  their  business;  that  no  amount  of  sympathy  with 
labor  or  philanthropic  sentiment  would  save  them  from  bank- 
ruptcy if  their  business  was  not  conducted  on  business  prin- 
ciples. On  the  other  hand,  with  equally  exacting  and  painful 
experience,  the  laborers  have  realized  that  if  they  did  not  do 
something  to  improve  their  own  condition  there  was  nobody 
whose  duty  it  was  to  do  it  for  them.  They  realized  that  modern 
political  economy  and  modern  industrial  methods  were  all  built 
upon  the  theory  that  the  laborer  is  a  free  agent ;  that  his  wages 
are  the  result  of  a  bargain  between  him  and  his  employer,  and 
that  it  is  his  right  and  privilege  and  his  duty  to  make  the  best 
bargain  he  can,  and  if  he  makes  a  poor  one  he  pays  the 
penalty.  By  experience,  sometimes  very  disagreeable,  the 
laborers  learned  that  single-handed  and  alone  they  were  unable 
to  compete  with  their  employers  on  these  matters  so  long  as 
employers  had  the  power  of  discharge  and  blacklist.  The 
laborers  realized  that  something  must  be  done  to  overcome  this, 
and  it  gradually  came  about,  as  it  always  does,  that  the  only 
effective  way  is  the  natural  way,  namely — organization. 

Unionism  Permanent 

What  was  effective  for  the  employers  became  necessary  for 
the  laborers.  Notwithstanding  the  legal,  social  and  industrial 
persecution  in  every  country  where  labor  organizations  have 
arisen,  and  they  have  accompanied  the  wage  system  every- 
where, the  unions  grew  with  this  development  of  complex  cor- 
porate industrial  enterprises.  All  this  shows  that  labor  organi- 


088         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

zations  are  a  permanent,  irresistible  part  of  modern  society. 
They  are,  in  fact,  just  as  permanent  and  as  extensive,  because 
they  are  just  as  natural,  as  the  wage  system  and  large  corpora- 
tions. Such  being  the  fact,  the  only  peaceful  solution  of  what- 
ever friction  arises  must  be  preceded  by  full  and  frank  recog- 
nition of  this  inevitable  condition.  Society  itself  cannot  exter- 
minate either  of  these  two  forms  of  organization  without  put- 
ting itself  back  to  a  state  of  industrial  barbarism.  There  is 
not  power  enough  in  any  form  of  government,  however  des- 
potic, to  stamp  out  corporations,  because  no  individual  effort 
will  furnish  any  approximate  equivalent  of  what  corporate 
effort  is  furnishing.  On  the  other  hand,  there  is  no  power 
strong  enough  to  stamp  out  labor  organizations  in  those  coun- 
tries where  capitalistic  organization  has  reached  any  degree  of 
proficiency  in  cheap  production. 

Something  Better  Must  Come 

The  trend  of  public  opinion  is  along  fairer  lines  than  it  used 
to  be.  The  rights  of  the  working  classes  are  demanded  by  the 
press;  public  opinion  demands  that  the  worker  be  treated  in 
accordance  with  the  teachings  of  humanity  and  civilization. 
Something  better  must  come  to  people  as  a  whole,  and  if  the 
managers  and  the  workers  will  understand  that  all  men  must 
be  fair  to  each  other,  and  will  carry  out  the  promises  made  to 
each  other,  the  improvement  in  labor  conditions  must  be  the 
result.  Both  corporations  and  labor  organizations  are  before 
the  bar  of  public  opinion  and  it  will  be  a  disgrace  to  our  age 
and  to  us  if  we  do  not  discover  some  method  by  which  the  public 
functions  of  these  organizations  may  be  brought  into  full  sub- 
ordination to  the  public,  and  that,  too,  without  violence,  and 
without  unjust  interference  with  the  rights  of  private  indi- 
viduals. It  will  be  unworthy  of  our  age  and  of  us  if  we  make 
the  discussion  of  this  subject  a  mere  warfare  against  men.  For 
in  these  great  industrial  enterprises  have  been  and  still  are 
engaged  some  of  the  noblest  and  worthiest  men  of  our  time.  It 
is  the  system,  its  tendencies  and  its  dangers,  which  society 
itself  has  produced,  that  we  are  now  to  confront.  And  these 
industries  must  not  be  crippled,  but  promoted.  The  evils  com- 
plained of  are  merely  of  our  own  making.  States  and  com- 
munities have  willingly  and  thoughtlessly  conferred  these  great 


WHAT  IS  THE  CAUSE  OF  LABOR  DISCONTENT?  689 

powers  upon  railways  and  corporations,  and  they  must  seek  to 
rectify  their  own  errors  without  injury  to  the  industries  they 
have  encouraged. 

It  depends  upon  the  wisdom,  the  culture,  the  self-control  of 
our  people,  to  determine  how  wisely  and  how  well  this  question 
shall  be  settled.  But  it  will  be  solved,  and  solved  in  the  interest 
of  liberty  and  justice,  I  do  not  doubt.  And  its  solution  will 
open  the  way  to  a  solution  of  a  whole  chapter  of  similar  ques- 
tions that  relate  to  the  conflict  between  capital  and  labor. 

The  true  policy  is  always  that  which  recognizes  the  inevita- 
bleness  of  the  natural.  The  natural  tendency  in  this  case  is  for 
both  sides  to  use  the  force  of  organization  or  collective  action, 
because  that  is  the  line  of  greatest  efficiency  and  least  resist- 
ance. It  is,  therefore,  the  true  economic  and  hence  the  true 
ethical  line  of  movement.  Whenever  and  so  long  as  each  of  two 
great  social  forces,  neither  of  which  can  be  suppressed,  refuses 
to  recognize  the  legitimacy  of  the  other,  so  long  will  there  be 
war  and  the  energies  of  both  be  wasted.  We  are  now  witness- 
ing exactly  that  wasteful  contest.  The  struggle  is  for  su- 
premacy, each  trying  to  enforce  the  rule  of  dictation  over,  in- 
stead of  co-operation  with,  the  other. 

Arbitrary  Spirit  Rules 

The  spirit  in  which  both  these  movements  was  conceived  was 
the  spirit  of  arbitrary  compulsion,  the  spirit  of  coercion,  for 
the  purpose  of  asserting  the  respective  power  of  each  to  coerce 
the  other.  This  has  been  so  extensive  and  so  unsatisfactory  to 
both  sides,  and  so  repulsive  to  the  whole  spirit  of  economic 
equity  and  social  peace,  that  it  is  forcing  the  attention  of  re- 
sponsible labor  leaders  and  great  capitalists  toward  a  more 
national  and  natural  method  of  treating  the  subject. 

It  is  not  for  capitalists  to  decide  the  basis  of  labor  organiza- 
tion. It  is  for  them  to  recognize  fully  and  freely  the  principle 
of  organization  and  the  right  of  the  laborers  to  organize.  If 
in  their  organized  action  they  demand  foolish  things,  the  cor- 
porations have  the  right  and  it  is  their  duty,  as  it  is  the  duty  of 
the  public,  to  criticize  the  laborers  for  making  these  demands. 
It  is  of  the  mistakes  growing  out  of  the  economic  crudities  of 
labor  organization  that  they  have  often  made  it  a  part  of  the 
policy  to  restrict  the  output.  But  these  are  details.  They  are 


690         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

mistakes  in  the  policy  of  trade  unions,  just  the  same  as  putting- 
up  the  price,  persecuting  competitors  and  bribing  politicians 
are  mistakes  in  the  policy  of  corporation. 
In  closing,  I  give  you  the  following : 

Almighty  Father  of  nations, 

Thine  is  the  sea  and  the  shore. 
Guide  us  and  guard  us  and  keep  us. 

The  land  of  the  open  door. 

Not  by  the  thunder  of  cannon, 

But  by  the  flash  and  the  flame 
Of  Thine  infinite  wisdom 

Keep  us  from  hate  and  shame. 

Yet  when  the  clanging  challenge 

Called  us  to  sea  and  to  shore, 
Blithely  we  went  where  the  battle-tide  flowed, 

Under  the  flag  we  adore. 

Never  was  banner  fashioned 

More  filled  with  the  high  hopes  of  men. 
Up  with  the  true  flag,  the  red,  white  and  blue  flag; 

God,  keep  it  stainless.     Amen. 


STABILIZATION  OF  COAL  MARKET  THROUGH  STORAGE    691 


STABILIZATION  OF  THE  COAL  MARKET  THROUGH 

STORAGE 

By  J.  C.  THOMPSON,  Director,  Department  of  Mines  and  Minerals, 

State  of  Illinois 

In  discussing  the  question  of  stabilizing  the  coal  market,  I 
think  it  is  first  advisable  to  take  into  consideration  some  of 
the  factors  that  have  led  up  to  the  present  crisis.  Probably 
some  of  you  are  aware,  as  I  am,  that  the  present  crisis  has 
brought  before  man's  mind — especially  in  this  part  of  the 
country — the  necessity  for  something  being  done  to  stabilize 
the  industry  to  prevent  a  recurrence  of  a  condition  such  as 
exists  at  the  present  time  in  the  United  States. 

In  dealing  with  that  question  we  ought  first  to  take  into 
consideration  the  factors  that  led  up  to  the  present  crisis. 
The  factors  are  these :  that  while  in  Illinois  the  mines  we  have 
at  present,  if  forced  to  the  maximum,  could  probably  produce 
150,000,000  tons  of  coal  per  year,  the  average  working  year 
in  Illinois  has  been  180  working  days,  and  in  some  instances 
it  is  down  to  120  days.  It  must  be  self-evident  to  any  experi- 
enced man  that  if  our  mines  have  to  be  shut  down  for  three 
or  four  months  during  the  hot  weather,  we  have  not  enough 
mines  in  Illinois  to  produce  the  coal  with  which  to  meet  the 
requirements  of  the  nation  during  the  extreme  cold  weather. 
Such  being  the  case,  what  are  we  going  to  do? 

Of  course,  I  have  heard  it  stated  that  the  miners  are  ready 
for  the  present  crisis.  I  was  very  sorry  the  other  day  to  hear 
a  telegram  read  to  the  effect  that  if  the  miners  worked  they 
would  be  earning  $13  a  day  now.  I  want  to  take  exception  to 
that.  A  man  making  a  statement  of  that  kind  absolutely 
stamps  himself  as  a  man  ignorant  of  the  mining  conditions. 

The  miners  having  contended  that  they  have  not  been  able 
to  get  what  they  are  entitled  to  except  by  striking,  I  am  not 
sure  that  we  can  deny  them  the  constitutional  right  to  refuse 
to  work.  Of  course,  morally  it  is  wrong,  but  it  is  their  con- 
stitutional right,  and  if  they  can  only  get  their  grievances 
remedied  in  that  way  and  there  is  no  other  way  open  to  them 
to  have  them  remedied,  what  can  they  do  ? 


692         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Only  Five  Months'  Work 

Now,  this  problem  must  bring  before  the  minds  of  experi- 
enced men  one  fact — we  must  do  something.  The  miner  says 
he  has  a  right  to  live.  He  cannot  earn  sufficient  money  during 
the  winter  to  maintain  himself  and  family  during  the  entire 
year  with  the  present  high  cost  of  living.  He  has  to  live  12 
months  in  the  year  and  he  gets  only  five  or  six  months*  work. 
He  appeals  his  case  to  the  country.  He  has  come  to  the  time 
when  the  public  generally  decides  against  the  miner,  for  the 
simple  reason  that  the  public  does  not  understand  the  condi- 
tions under  which  the  miner  works — the  fact  is  that  up  to  the 
present  time  it  has  been  impossible  for  him  to  get  steady  work 
six  days  a  week.  While  I  admit  that  the  demand  for  five  days 
a  week  and  six  hours  a  day  is  perhaps  ill  advised,  still  the 
miners  considered  that  if  they  worked  five  days  a  week  during 
the  winter  there  would  be  a  possibility  of  more  work  in  the 
summer.  Of  course,  that  may  not  be  the  remedy.  I  do  not 
consider  it  is  the  correct  remedy. 

Storage  Is  Solution 

My  experience  teaches  me — and  I  have  had  some  experience 
in  different  countries — that  the  only  solution  lies  in  the  storage 
of  coal.  Run  the  mines  during  the  summer  and  have  some 
means  of  storing  sufficient  quantity  of  coal  that  will  serve  the 
public  need  with  the  mines  running  ordinarily  during  the  win- 
ter. Of  course,  people  who  are  not  acquainted  with  the  details 
of  coal  mining  will  wonder  how  we  propose  to  do  that,  and  in 
doing  it  you  must  remember  this :  that  there  are  three  parties 
involved — the  operators,  the  miners  and  the  general  public. 
We  have  had  a  good  deal  of  the  "dear  public"  during  this 
struggle.  The  public  must  bear  a  part  of  the  burden.  If  they 
want  to  have  the  comforts,  they  must  bear  their  corresponding 
responsibility  with  the  other  two  parties,  because  the  miners 
on  the  one  hand  and  the  operators  on  the  other  have  just  as 
much  right  to  existence  as  the  general  public.  The  trend  of 
opinion  has  been  along  the  lines  that  the  public  was  something 
separate  and  apart  from  the  miners  or  operators.  That  is 
wrong — the  miners  and  operators  are  a  part  of  the  general 
public.  Each  must  bear  a  burden. 

The  question  of  storage  of  coal  is  one  that  has  received  some 


STABILIZATION  OF  COAL  MARKET  THROUGH  STORAGE    693 

attention  for  a  number  of  years  in  European  countries.  I  am 
prepared  to  admit  that  our  climate  differs  from  theirs,  and 
what  might  be  possible  for  them  to  do  might  in  some  respects 
be  a  physical  impossibility  for  us  to  do  in  this  country. 

Methods  of  Storage 

Now,  what  are  the  objections  to  storage  of  coal?  It  has 
been  ascertained  we  have  two  methods.  Storage  on  the  sur- 
face— the  danger  in  that  system  is  twofold.  One  is  the  rapid 
deterioration  of  coal  due  to  evaporation.  It  has  been  shown 
that  coal  exposed  to  the  atmosphere  would  deteriorate  to  the 
extent  of  something  in  the  neighborhood  of  25  per  cent,  in 
four  months.  You  have  got  to  provide  storage  of  coal  to  cover 
six  or  nine  months,  probably  twelve.  That  is  one  of  the  objec- 
tions to  storing  coal  open  to  the  atmosphere.  The  other  arises 
from  the  danger.  You  know  that  in  many  mines,  especially  in 
Southern  Illinois,  we  have  more  or  less  sulphur  in  the  coal, 
and  whenever  you  have  sulphur  in  the  coal  you  leave  exposed 
to  the  atmosphere  you  are  in  danger  of  having  spontaneous 
combustion  and  the  loss  of  a  whole  lot  of  coal  instead  of  25 
per  cent.  That  danger  is  not  an  imaginary  one.  It  is  a  real 
danger.  I  have  seen  in  Illinois  coal  dumped  on  the  open  ground 
that  contained  as  much  as  32%oo  per  cent,  of  sulphur,  and  in 
10  days  from  the  time  it  was  dumped  it  was  on  fire.  Now,  that 
danger  makes  the  storing  of  coal  on  the  surface  and  exposed 
to  the  atmosphere  almost  impracticable, 

Storage  Under  Water 

What  is  the  next  solution?  It  has  been  proven  by  experi- 
ments that  you  can  store  coal  under  water  for  as  long  a  period 
as  five  years  with  only  a  loss  of  about  one-half  of  1  per  cent. 
By  doing  so  you  will  avoid  both  things  that  you  will  encounter 
by  storing  the  coal  on  the  surface. 

That  is  a  pretty  big  order — to  store  coal  under  water — but 
it  is  also  a  big  order  to  have  the  country  short  of  fuel  for  one 
period  of  the  year,  and  if  we  have  the  solution,  we  have  over- 
come a  great  problem. 

Nature  teaches  a  lesson.  For  a  hundred  thousand  years 
nature  has  stored  coal  under  the  ground.  That  is  the  reason 
we  have  the  valuable  coal  today,  and  we  have  that  lesson  from 


694         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

nature.  Now  the  question  comes — if  you  have  no  other  remedy 
than  storing  coal  under  water,  you  have  to  make  provision 
for  the  pumping  and  keeping  it  covered  with  at  least  six  inches 
of  water,  and  you  can  store  your  coal  almost  indefinitely  and 
retain  practically  all  of  the  valuable  coal. 

Who  Will  Pay  Cost? 

Well,  upon  whom  should  that  burden  rest  ?  Should  that  bur- 
den rest  upon  the  operators  of  the  coal  mines  ?  Should  it  rest 
upon  the  miners  ?  Or  should  it  rest  upon  the  nation  ? 

Of  course,  you  cannot  hope  to  store  coal  in  that  manner 
without  expense,  because  it  will  cost  large  sums  of  money,  but 
it  would  be  worth  it.  It  would  stop  dissatisfaction  among 
miners ;  it  would  prevent  operators  from  losing  interest  in  the 
mines  because  of  the  fact  that  they  could  not  run  the  mine  for 
a  portion  of  the  year.  Consequently  we  are  driven  to  the  con- 
clusion that  the  only  practical  solution  for  the  problem  is  to 
arrange  for  the  storing  of  coal  in  the  summer  and  distribute 
the  cost  upon  the  whole  nation.  In  other  words,  the  public 
ought  to  bear  a  share  of  the  responsibility  and  burden  and  not 
expect  that  either  the  miner  or  the  operator  could  possibly 
undertake  to  invest  all  that  is  necessary  to  store  the  coal  in 
such  a  manner  as  that. 

I  need  not  go  into  a  lot  of  chemical  equations  as  regards  the 
gases  evaporating  from  coal  stored  on  the  surface.  Experi- 
ments give  all  those  figures.  It  is  sufficient  to  say  that  the 
coal  deteriorates  very  rapidly  in  value.  I  have  thought  upon 
this  subject.  I  have  talked  to  experienced  men  and  have  read 
all  the  literature  that  I  could  possibly  find,  prepared  by  men 
who  have  conducted  experiments  along  those  lines.  All  seem 
to  come  to  the  conclusion  that  the  only  safe  and  sure  way  is  to 
store  coal  under  water.  That  is  being  done  today  in  more  than 
one  European  country,  and  I  think  what  can  be  done  there 
can  and,  if  the  need  arises,  ought  to  be  done  in  this  country. 

Very  Slight  Loss  from  Storage 

If  it  is  true  that  coal  stored  under  water  will  not  lose  more 
than  one-half  of  1  per  cent,  of  its  value  in  five  years,  then  it  is 
a  very  easy  equation  to  find  out  how  much  it  would  lose  in  six 


STABILIZATION  OF  COAL  MARKE V  THROUGH  STORAGE    695 

months.  It  would  lose  only  one-tenth  of  that — that  is,  if  the 
evaporation  goes  on  at  a  given  rate,  and  I  understand  it  does. 

Gentlemen,  we  are  face  to  face  with  a  grave  situation,  and 
I  would  be  sorry  to  have  this  American  Mining  Congress  send 
resolutions  up  to  the  Congress  of  the  United  States  asking  for 
laws  dealing  with  this  subject,  unless  those  laws  were  of  a 
practical  nature  and  based  upon  fair  play  and  justice  to  every 
party  concerned  in  the  coal  business.  We  must  do  that. 

Take  into  consideration  the  number  of  mines  we  have 
in  Illinois  alone — we  have  something  like  943  coal  mines  in 
Illinois,  and  of  those  there  is  not  5  per  cent,  that  work 
continuously  throughout  the  year.  Some  work  more  than 
others,  and  generally  it  is  the  mines  where  they  have  valuable 
veins  of  coal.  These  mines  have  all  the  advantage  over  the 
others.  They  do  get  some  work  during  the  summer  time,  for 
railroads  must  have  coal.  Other  industries  and  the  public 
generally  do  not  require  much  coal  during  the  hot  weather, 
but  the  railroads  and  street  car  lines  which  have  to  produce 
electricity  require  a  continuous  supply,  and  the  consequence  is 
that  the  producers  of  a  very  high-class  coal  have  the  advantage 
during  the  summer  time. 


Selling  on  B.  T.  U.  Basis 

I  am  not  so  sure  that  the  time  will  not  soon  be  here  when 
all  coal  will  be  bought  and  sold  on  the  B.  T.  U.  basis — that  is, 
sold  at  a  price  regulated  according  to  units  of  heat  that  the 
coal  contains.  I  have  mentioned  that  fact  before  an  audience 
and  received  a  retort  like  this :  "Hold  on  there,  you  belong  to 
the  southern  part  of  the  State.  You  are  advocating  a  business 
that  would  insure  the  southern  part  of  the  State  continuous 
work.  Where  the  mines  have  a  low  B.  T.  U.,  business  would 
be  shut  down  altogether."  I  do  not  think  so.  I  think  the 
mines  in  the  southern  part  of  the  State  where  the  B.  T.  U. 
runs  very  high  would  probably  have  the  class  of  trade  that 
demands  a  high  grade  of  coal.  Probably  where  they  use  it  only 
for  heating  houses  they  would  not  necessarily  require  as  high- 
class  coal  as  that,  probably  on  the  mistaken  notion  that  the 
best  coal  is  the  cheapest.  It  is  if  used  under  certain  conditions. 
If  used  in  an  open  grate,  it  is  not. 


696         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Plan  of  Stabilization 

Now,  then,  if  we  could  devise  means  of  co-operating  to  have 
the  coal  stored  during  the  summer  under  conditions  by  which 
it  would  not  deteriorate  or  lose  its  value,  and  then  have  that 
coal  sold  on  a  B.  T.  U.  basis,  we  would  be  able  to  stabilize  the 
coal  mine.  We  would  not  have  so  much  fluctuation  in  the 
trade.  We  would  not  have  a  surplus  one  month  and  a  coal 
famine  the  next  month.  We  would  have  a  continuous  supply 
and  would  be  able  to  maintain  a  standard  quality  all  the  time. 
I  hope  I  make  myself  clear. 

I  am  not  going  to  say  that  we  will  ever  be  able  to  stabilize 
the  different  classes  of  coal  for  different  purposes,  but  the 
public  will  gradually  learn  that  it  is  not  to  its  best  interest 
to  compete  in  the  purchase  of  coal  with  those  large  consumers 
who  have  valuable  engines  and  valuable  plants  to  run  and 
require  the  best  coal  for  the  reason  that  they  get  more  power 
from  it.  But  for  the  purpose  of  supplying  heat  for  dwellings 
I  do  not  suppose  we  will  ever  be  able  to  standardize  it.  The 
public  will  soon  learn  that  it  is  to  its  advantage.  If  we  can 
finally  have  a  system  of  having  the  coal  sold  on  the  B.  T.  U. 
basis  and  having  the  coal  stored  in  such  a  manner  that  it  will 
not  deteriorate  and  prevent  the  possibility  of  loss  through  fire, 
we  will  at  least  have  stabilized  the  coal  market  throughout  the 
whole  year.  Having  done  that,  we  will  remove  to  a  very  large 
extent  this  discontent  among  the  miners. 

I  can  easily  understand  why  a  man  should  be  discontented, 
and  I  think  if  he  finds  that  the  shortage  of  work  is  continuing 
year  after  year  and  no  one  taking  any  interest  in  the  matter, 
it  is  natural  that  the  man  should  become  chagrined  and  a 
revolutionist  in  spirit.  He  has  a  right  to  expect  that  the  Gov- 
ernment is  going  to  protect  him  to  a  certain  extent  in  cases 
where  he  is  unable  to  protect  himself.  It  is  the  Government's 
duty,  and  it  is  his  free-born  right,  the  American  right,  that  the 
Government  should  take  some  interest  in  his  case ;  and  if  there 
are  circumstances  over  which  he  has  no  control,  over  which 
the  operator  has  no  control,  then  it  becomes  the  duty  of  the 
public  generally,  and  the  nation  as  a  whole,  to  get  some 
system  that  will  obviate  all  this  suffering,  all  this  uncertainty, 
and  consequently  all  this  expense. 


STABILIZATION  OF  COAL  MARKET  THROUGH  STORAGE    697 

Strike  Loss  Would  Pay  Storage 

The  nation  is  losing  more  money  now,  every  day,  than  is 
needed  to  make  some  very  large  provisions  for  the  storing  of 
coal.  The  public  will  bear  their  share  of  the  burden,  which 
they  must  necessarily  do  if  they  want  to  derive  any  benefits 
from  the  introduction  of  a  system  that  will  provide  coal  for 
the  country. 

Look  around  the  country  and  notice  the  large  amount  of 
mineral  wealth  that  nature  has  provided  for  the  good  of  men. 
You  can  get  a  fairly  clear  perception  of  that  by  looking  at  some 
of  these  minerals  we  have  on  display  at  the  exhibition.  The 
wealth  has  been  put  there  by  a  beneficent  nature,  and  it  is 
the  duty  of  every  man  to  try,  if  possible,  to  wrest  from  nature 
the  secrets  of  that  wealth.  How  are  we  going  to  do  that? 
Are  we  going  to  do  that  by  continually  having  such  fights  as 
we  have  at  the  present  time,  or  are  we  going  to  allow  a  man 
who  knows  the  secrets  of  nature  and  has  made  them  his  life 
study  point  the  way  for  others?  One  fact  stands  out  pretty 
clearly,  and  that  is  that  nature  has  provided  abundance  for  all ; 
and  man  is  heir  to  all  that  wealth,  but  to  obtain  possession  of 
it  he  must  combine  his  forces.  That  is,  the  man,  the  thinker, 
the  philosopher,  must  study  those  questions,  and  he  must  teach 
others.  That  is  why  we  have  this  exhibition — to  let  others 
not  intimately  acquainted  with  the  conditions  under  which  this 
wealth  is  obtained  see  and  understand.  If  we  are  willing  to 
combine  and  co-operate,  one  with  the  other,  in  spite  of  the 
fact  that  nature  guards  her  secret  wealth,  it  is  ours  to  take 
if  we  will  only  adapt  ourselves  to  nature's  conditions. 

No  Substitute  for  Coal 

So  far  as  coal  is  concerned,  it  seems  that  we  have  not  yet 
reached  the  age  when  we  can  find  a  substitute  by  taking  the 
electricity  from  the  air,  that  would  be  a  substitute  for  coal, 
or  taking  heat  from  the  atmosphere.  We  have  not  reached 
that  yet.  My  opinion  is  that  some  day  we  will.  So  we  have  to 
deal  with  coal.  We  have  abundance  of  coal,  more  than  is 
necessary  to  supply  the  wants  of  civilization  for  thousands  of 
years.  Are  we  going  to  allow  the  fact  that  storing  tanks  will 
cost  money  to  stand  in  the  way  of  the  best  interests,  the 
health  and  longevity  of  the  nation?  Can  we  afford  to  do  that, 


698         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

while  at  the  same  time  we  drive  women  and  children  to  death, 
or,  at  least,  serious  injury,  by  starvation?  Surely  if  the 
nation's  wealth  depends  upon  the  people,  and  it  does  to  a  large 
extent,  we  ought  to  be  willing  to  face  this  issue  squarely  and 
ascertain  how  much  it  will  be  necessary  to  spend  in  the  way 
of  storing  to  provide  the  nation  with  coal  during  the  year. 

I  make  these  suggestions,  Mr.  Chairman,  at  this  meeting, 
but  I  do  not  choose  to  go  into  details  in  regard  to  storing  coal 
at  this  time.  I  have  the  details  on  paper  at  home  and  will  put 
the  facts  in  the  hands  of  this  Congress  if  desired. 

Will  Public  Co-operate? 

One  thing  stands  out  clearly.  In  this  present  labor  issue 
we  have  numerous  complaints.  Some  have  complained  against 
the  operators  for  bringing  the  country  to  this  condition.  Some 
have  complained  bitterly  against  the  miners,  and,  generally 
speaking,  both  the  miners  and  the  operators  are  receiving  the 
criticism  of  the  public  on  this  question.  I  want  the  public  to 
take  the  question  home  to  themselves.  Are  you  prepared  to 
share  in  the  responsibility  and  face  this  issue  squarely  and 
assist  both  operators  and  miners  in  devising  some  method  of 
relief?  The  public  can  assist  and  the  miners,  operators  and 
men  of  science  will  find  a  way  to  do  it  if  they  are  supplied 
with  the  means.  There  is  no  question  but  that  the  only 
way  to  stabilize  the  coal  market  is  by  storage  under  a  system 
whereby  our  supply  will  be  free  from  deterioration  and  free 
from  the  danger  of  fire  and  total  loss.  Storage  should  be 
in  the  most  economical  manner,  though  storage  will  never  be 
as  economical  as  delivery  direct  from  the  mine.  Necessarily 
there  must  be  some  cost  in  handling  and  storing.  The  public 
must  bear  its  portion  of  the  weight  and  responsibility  of  this 
system.  We  must  find  relief  from  present  conditions,  other- 
wise the  nation  generally  is  going  to  suffer,  and  we  have  no 
right  to  inflict  suffering  upon  others.  We  should  face  our 
responsibilities.  Each  of  the  parties  to  this  contract  will  have 
to  co-operate  with  the  other;  each  take  a  responsibility  and 
remember  that  it  is  a  duty  to  humanity  and  a  duty  to  them- 
selves. I  thank  you.  [Applause.] 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE          699 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE 

A  Paper  Read  Before  The  American  Mining  Congress  by  GEORGE  S.  RICE, 
Chief  Mining  Engineer  of  the  U.  S.  Bureau  of  Mines 

The  problem  of  standardizing  different  kinds  and  grades  of 
coal  produced  in  the  United  States  has  become  more  and  more 
important  with  the  increasing  railroad  facilities,  up  to  the  time 
of  war  congestion,  bringing  coals  of  distant  districts  into  local 
markets.  This  has  been  accentuated  by  the  growth  of  the  ex- 
port trade  during  the  war,  with  prospective  greater  growth 
from  post-war  conditions  in  Europe  and  other  parts  of  the 
world. 

In  the  early  days  of  coal  mining  it  was  the  custom  for  the 
miner  to  fork  the  coal  in  loading,  leaving  the  small  coal  in  the 
mine,  so  that  it  was  comparatively  easy  for  the  miner  to  free 
the  coal  from  extraneous  impurity  and  the  responsibility  of 
clean  coal  was  his.  Later,  with  industrial  growth  in  this  coun- 
try, when  the  small  coal  and  slack  was  found  to  be  valuable  for 
steam-making,  the  coal  was  shoveled  up  and  more  or  less  slate 
and  sulphur  with  it;  then  to  obtain  good  coal  for  shipment  it 
was  necessary  for  the  operator  to  clean  the  coal  when  it  reached 
the  surface  by  installing  picking  and  washing  methods.  Hence 
the  quality  of  coal  from  any  one  mine  varied  widely  with  the 
degree  of  care  taken  in  the  cleaning  process.  Then  in  the 
markets  receiving  diversified  kinds  of  coal  there  followed  an 
increasing  use  of  sampling  and  analyses,  not  only  to  distinguish 
volatile-fixed  carbon  ratios  in  different  kinds  of  coal,  but  to 
determine  if  a  particular  shipment  was  up  to  an  agreed  quality 
standard. 

To  a  small  extent,  purchases  were  made  based  on  the  ulti- 
mate heat  content  of  the  coal  as  indicated  by  the  B.  T.  U.  deter- 
mined for  a  unit  weight  of  coal,  the  price  being  based  on  an 
agreed  amount  of  B.  T.  U.  with  special  penalties  in  case  the 
sulphur  and  ash  exceeded  certain  specified  percentages.  This 
plan  is  specially  advocated  by  purchasers  and  operating  engi- 
neers of  large  plants  whose  business  it  is  to  transform  as  much 
of  the  heat  in  coal  into  available  power  or  heat  produced  and 


700         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

as  cheaply  as  possible.  To  obtain  the  cheapest  heat  units  is 
usually  an  inducement  to  install  special  furnaces  and  devices 
for  burning  the  lower  grade  fuels.  To  discover  which  coal  has 
the  possibility  of  being  cheaper  in  producing  heat  or  power 
units,  the  consumer  must  know  the  average  B.  T.  U.  content  of 
that  coal  and  adapt  his  methods  to  that  fuel.  However,  this 
plan  was  not  generally  accepted  by  the  coal  industry.  When 
profitable  sales  can  be  made  without  yielding  to  restrictions 
there  is  little  inducement  to  submit  to  what  may  be  considered 
a  refinement.  There  is  also  difficulty  in  obtaining  truly  repre- 
sentative samples  and  such  work  cannot  be  done  without  cost, 
so  that  most  consumers  have  relied  upon  inspection  and  the 
good  faith  of  the  mine  operator  and  knowledge  of  the  kind  of 
coal  his  mine  or  mines  produce. 

Usually  purchase  on  a  specification  basis  has  prevailed  only 
for  very  large  purchasers  buying  on  the  open  market  and  for 
Municipal,  State  and  Government  organizations  where  bids 
were  received  from  either  jobbers  or  producers  and  where  dif- 
ferent kinds  of  coals  from  different  localities  might  enter  into 
the  bidding. 

Systematic  Sampling 

A  method  of  systematic  sampling  and  making  analyses  was 
found  to  be  highly  important  in  obtaining  the  high  quality  of 
coal  which  is  vitally  necessary  for  the  ships  of  the  navy.  Coal 
for  this  purpose  must  be  of  such  volatile-fixed  carbon  ratio  as 
to  be  practically  smokeless  and  the  ash  at  a  minimum  to  obtain 
the  maximum  efficiency  of  the  boilers,  and  hence  speed  and 
radius  of  cruising  of  the  vessel.  The  navy  specifications  were 
so  drawn  as  to  obtain  the  necessary  tonnage  from  any  given 
district  and  of  the  highest  grade  that  the  district  could  supply. 
For  the  purchase  of  coal  for  the  Panama  Canal  similar  require- 
ments were  made,  inasmuch  as  fuel  carried  so  far  must  be  as 
free  from  inert  or  waste  material  as  possible,  since  otherwise 
heavy  freight  charges  must  be  paid  on  worse  than  worthless 
weight. 

Advantage  of  Private  Contracts 

By  private  contracts  the  fast  ocean  liners  obtained  "picked 
coal"  from  specific  collieries  of  responsible  operators,  which 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE.         701 

would  insure  the  coal  being  of  the  very  best  grade.  This  system 
works  out  admirably  for  getting  high-grade  coal  of  a  particular 
kind.  When  it  is  necessary  to  purchase  coal  from  the  open 
market  or  by  submitting  proposals  for  bids,  then  it  becomes 
very  important  that  there  should  be  some  method  of  standard- 
izing by  specifications. 

This  became  particularly  apparent  during  the  war  when  the 
various  local  coal  markets  were  badly  disturbed  through  the 
changes  of  routing  of  coal  and  the  formation  of  zones  of  dis- 
tribution of  the  nearest  coal  fields,  primarily  for  more  expedi- 
tious transportation  of  the  coal  where  it  was  needed  and  short- 
ening the  circuit  of  the  railway  cars.  Then  there  being  no 
standards  under  such  conditions,  the  result  was,  as  widely 
known,  that  careless,  irresponsible  or  unscrupulous  miners  and 
operators  permitted  a  large  amount  of  refuse  matter  to  be 
loaded  with  the  coal,  so  that  it  was  estimated  by  the  fuel  admin- 
istration agencies  that  the  coal  production  included  at  least  10 
or  15  per  cent,  of  avoidable  waste  material,  which  meant  mil- 
lions of  tons  of  refuse  were  transported  and  clogged  the  fur- 
naces. It  was  aimed  to  meet  this  condition  in  the  latter  part  of 
the  war  by  the  establishment  of  an  inspection  system  with  arbi- 
trary powers,  but  the  mere  visual  and  scattered  inspection  by 
comparatively  few  inspectors  was  not  satisfactory  and  in  im- 
portant cases  recourse  was  always  had  to  careful  sampling  and 
analysis  of  delivered  coal. 

Methods  of  Sampling  and  Analysis 

The  conception  and  point  of  view  of  sampling  and  analysis 
as  practiced  up  to  about  15  years  ago  gave  little  clue  to  the 
quality  of  a  particular  kind  of  coal.  Its  usefulness  was  con- 
fined to  determining  the  ratios  of  volatile  matter  to  fixed  car- 
bon, moisture,  ash  and  sulphur  contents,  but  even  these  ratios 
and  determinations  were  uncertain  because  of  a  lack  of  stand- 
ardization in  the  methods  of  analysis.  The  greatest  discrepan- 
cies arose,  however,  from  the  way  the  samples  were  taken.  It 
was  customary  for  operators  when  asked  about  the  composition 
of  their  coal  to  have  analysis  made  of  a  selected  piece  of  the 
best  coal,  and  this  went  so  far  that  one  of  our  principal  coal- 
mining States,  undertaking  to  obtain  a  complete  record  of 
kinds  of  coal  mined  by  all  the  different  mines  of  the  State,  had 


702         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  mine  inspectors  send  in  samples  without  any  specifications 
as  to  how  the  samples  were  to  be  taken.  Naturally  under  these 
conditions  they  selected  small  hand  specimens  of  the  best  look- 
ing coal,  and  a  bulletin  was  published  which  gave  pages  of 
analyses  that  are  practically  of  no  value  because  they  do  not  in 
any  way  represent  the  whole  seam  of  coal  either  as  in  the  bed 
or  as  mined  and  shipped. 

The  technologic  branch  of  the  United  States  Geologic  Survey, 
which  branch  later  became  the  nucleus  of  the  Bureau  of  Mines, 
undertook  at  the  time  of  the  St.  Louis  Exposition  in  1904  to 
find  out  if  the  quality  of  coal  as  obtained  from  a  colliery  could 
be  determined  by  systematically  sampling  in  the  mine,  where 
the  sampler,  in  taking  a  sample  of  the  coal  bed,  from  top  to 
bottom,  undertook  to  include  or  exclude  slate,  sulphur  and  clay 
partings  in  the  same  way  that  the  miner  would  include  or  reject 
the  same.  Such  sampling  came  very  much  nearer  to  represent- 
ing the  kind  of  coal  being  mined  than  had  been  done  previously, 
but  upon  comparing  the  analyses  thus  gathered  with  the 
analyses  of  the  coal  on  cars  which  were  shipped  from  the  same 
mines  to  the  exposition  for  testing  it  was  found  that,  if  the  ash 
in  the  mine  sample  was  represented  by  unity,  the  ash  in  the  car 
samples  varied  from  1.35  to  1.80 — that  is,  in  the  worst  case, 
almost  twice  as  much  as  in  the  samples  gathered,  with  the  par- 
ticular intention  of  duplicating  the  impurity  included  by  the 
miner.  Assuming  that  the  car  samples  were  truly  representa- 
tive of  the  coal,  and  in  this  case  there  was  excellent  opportunity 
for  proper  sampling  because  the  coal  passed  through  crushing 
machinery,  it  meant  that  sampling  the  coal  in  place  at  the  mine, 
no  matter  how  carefully  and  systematically  done,  could  not 
represent  the  coal  that  was  shipped  to  market,  and  this  conclu- 
sion has  since  frequently  been  reached  by  similar  kinds  of  tests 
by  the  Bureau  of  Mines  and  other  agencies. 

It  is  always  understood  today  that  such  analyses  of  mine 
samples  must  not  be  considered  as  representative  of  the  coal  as 
shipped.  The  value  of  such  mine  sampling  is  to  determine  the 
true  ratio  of  the  component  parts  of  the  coal  in  the  bed  and  the 
best  possible  result  which  might  be  expected  with  practically 
perfect  picking  and  cleaning  methods. 

The  impurities  which  are  added  in  loading  are  not  altogether 
due  to  intentional  inclusion  of  foreign  particles  with  the  coal, 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE     703 

but  in  a  great  degree,  especially  in  certain  mines,  ore  due  to  the 
accidental  or  unavoidable  inclusion  of  pieces  of  draw  slate  and 
roof  material  which  have  fallen  into  the  coal  as  shot  down,  and 
also  in  the  process  of  loading  the  shoveling  up  of  under  clay  or 
floor  slate,  partings  and  bone  coal.  Again,  in  pulling  pillars, 
the  partings  often  become  so  crushed  and  mixed  in  with  the 
balance  of  the  coal  when  mined  that  picking  them  out  while 
shoveling  is  impracticable.  It  must  not  be  understood  from 
what  has  just  been  said  that  mine  sampling  is  not  useful. 
Systematic  mine  sampling  has  been  found  to  be  of  the  utmost 
value  in  the  conduct  of  the  mines.  It  enables  the  operator  to 
determine  from  what  part  of  the  mine  poor-grade  coal  may  be 
expected,  and  the  analyses  furnished,  when  contrasted  with 
those  of  samples  from  the  coal  prepared  for  the  market,  give 
information  as  to  the  efficiency  of  cleaning  or  washing  methods 
employed.  It  has  also  proven  of  use  to  the  user  in  setting  ideal 
limits  and  furnishing  a  basis  for  comparison  of  coals  from 
different  districts. 

The  foregoing  conclusions  have  virtually  forced  themselves 
upon  every  coal  engineer,  and  thus  it  becomes  necessary  where 
sampling  and  analysis  is  to  be  of  guidance  in  shipped  coal  to 
determine  where  and  how  samples  may  be  obtained  which  will 
be  truly  representative  of  the  coal  in  any  particular  car  or 
shipment.  ^ 

Wide  Variation  in  Quality 

It  is  well  known  to  coal-mining  men  that  the  quality  of  coal 
varies  widely  in  each  pit  car  or  mine  car,  due  to  where  the  coal 
comes  from  the  mine,  the  care  of  the  miner  who  loads  it,  and 
whether  the  load  is  chiefly  of  lump  put  on  the  car  by  hand,  or 
small  coal  shoveled  up  from  the  floor,  or  machine  dust  known  as 
""bug  dust."  The  latter  may  have  come  from  cutting  in  a  bone 
coal  or  in  a  clay  band.  Therefore,  no  two  cars  are  quite  alike, 
and  the  variation  is  wide  where  miners  are  found  who  will 
with  intent  put  in  sulphur  balls  or  slate  in  the  bottom  of  the 
car  and  cover  it  over  with  coal.  In  a  large  mine  this  situation 
tends  to  equalize  over  a  whole  day's  rim,  but,  on  the  other  hand, 
it  generally  cannot  equalize  in  loading  a  particular  railroad  car, 
because,  as  is  the  case  at  most  mines,  there  is  no  interposing 
large  storage  bins,  and  a  trip  of  cars  brought  to  the  foot  of  a 


704         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

shaft  may  come  from  a  particular  branch  or  entry  where  either 
good  coal  or  exceptionally  poor  coal  is  loaded.  Hence  any  two 
railroad  cars  may  vary  widely  in  their  quality.  Again,  in  a 
train  of  cars  the  average  of  the  mine  may  be  maintained  very 
well,  but  the  small  buyer  has  to  form  a  judgment  from  the  coal 
in  only  one  car. 

How  Shall  Sampling  Be  Done 

With  these  difficulties  in  mind,  how  shall  the  sampling  be 
done?  It  is  perfectly  evident  that  a  sample  which  does  not 
truly  represent  the  coal  should  not  be  analyzed.  The  Bureau  of 
Mines  has  on  many  occasions  refused  to  analyze  samples,  where 
it  is  doubtful  that  the  sample  was  representative.  One  method 
of  getting  a  representative  sample  would  be  to  take  a  very  large 
number  of  small  grab  samples  to  form  a  gross  sample.  By  the 
theory  of  chance,  a  sufficiently  large  number  of  samples  if  gath- 
ered from  different  points  would  give  a  correct  average  result, 
provided  each  sample  was  taken  by  pure  chance  throughout  the 
mass  of  broken  coal  and  no  systematic  errors  of  selection  intro- 
duced. Mr.  0.  P.  Hood,  Chief  Mechanical  Engineer  of  the 
Bureau,  reports,  as  an  illustration  of  the  tendency  of  large 
numbers  of  observations  to  indicate  a  true  mean,  that  the 
Bureau  has  had  occasion  to  compare  the  results  of  such  sampling 
of  two  quantities  of  coal,  each  aggregating  something  over  half 
a  million  tons.  A  very  large  number  of  samples  and  analyses 
entered  into  these  series.  One  set  was  taken  by  methods  ap- 
proved by  the  Bureau,  while  the  other  set  was  taken  by  methods 
which  were  far  less  satisfactory.  The  variations  in  the  poorer 
set  were  erratic  and  considerably  more  than  in  the  approved 
set.  The  average  heat  value  of  the  two  sets,  however,  checked 
almost  exactly.  This  indicates  that  where  a  sufficiently  large 
number  of  samples  are  taken  the  average  approaches  a  correct 
value. 

Another  method  would  be  to  treat  the  whole  shipment  as  a 
gross  sample,  crushing,  mixing  and  reducing,  as  is  the  practice 
with  valuable  ore.  It  is  perfectly  obvious  that  for  any  given 
shipment  neither  can  an  unusually  large  number  of  small  sam- 
ples be  taken,  nor  can  the  whole  shipment  be  treated  as  a  gross 
sample.  An  abridgment  of  these  methods  must  be  used.  A 
large  amount  of  work  has  been  done  by  the  Bureau's  Fuel 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE  705 

Division,  in  charge  of  Mr.  Hood,  as  well  as  by  many  private 
agencies  and  technical  societies  in  determining  the  proper  pro- 
cedure in  the  sampling  of  shipped  coal  and  the  standardizing 
of  analytical  work.  Finally  a  joint  committee  of  the  American 
Chemical  Society  and  the  Society  of  Testing  Materials,  on  which 
Bureau  representatives  served,  have  agreed  on  standardizing 
methods  after  painstaking  investigations  and  these  have  been 
published  (1916)  by  the  latter  Society  as  "A.  S.  T.  M. 
Standards." 

Space  will  not  permit  inclusion  or  discussion  of  these  stand- 
ards in  this  paper,  but  the  underlying  principle  of  coal  sampling 
may  be  stated  as  follows : 

The  amount  of  gross  sample  and  the  size  to  which  it  must  be 
crushed  are  determined  by  the  size  of  the  largest  piece  of  im- 
purity. In  general,  when  samples  aggregating  not  less  than 
one  thousand  pounds  are  collected  by  equal  increments,  varying 
from  10  to  50  pounds  each,  depending  upon  the  size  and  char- 
acter of  impurities  in  the  coal,  results  are  obtained  of  sufficient 
accuracy  to  represent  one  or  two  thousand  tons. 

As  stated  by  Mr.  Hood,  the  problem  is  one  of  taking  a  suffi- 
cient number  of  increments  to  accumulate  a  gross  sample  of 
representative  character.  It  is  very  difficult  to  select  samples 
without  some  systematic  error,  except  when  the  coal  is  being 
handled  from  one  container  to  another,  and  it  is  at  such  points 
that  sampling  should  be  done. 

Three  Kinds  of  Cases 

Summarized,  we  have  three  kinds  of  cases : 

First,  where  a  trainload  of  coal  may  go  to  a  pier  for  loading 
a  ship  for  the  navy  or  for  export.  Such  coal  for  tidewater  is 
usually  loaded  in  dump  bottom  cars  and  this  affords  an  oppor- 
tunity for  taking  many  small  samples  in  the  process  of  dump- 
ing each  car. 

In  the  second  case,  we  have  an  individual  car  shipped  to  a 
manufacturing  concern,  power  plant  or  office  building.  To 
properly  sample  a  single  car  is  a  difficult  proposition.  It  should 
be  sampled  while  being  loaded  or  while  being  unloaded.  To 
sample  it  after  delivery  has  often  been  done,  but  with  unsatis- 
factory results. 

Various  devices  have  been  proposed  and  tried,  such  as  driv- 


706         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ing  down  a  pipe  into  the  car  or  a  pile,  or  using  an  auger  within 
a  pipe.  These  devices  have  not  proven  satisfactory,  as  most  of 
the  sample  comes  from  the  upper  part  of  the  pile ;  while  ap- 
proximate results  can  be  obtained  with  nut  and  slade  coal,  these 
devices  could  not  be  used  for  lump  coal. 

One  of  the  best  plans  of  sampling  at  the  mine  is  to  install  an 
automatic  sampler  in  the  loading  chute.  Mr.  Erskine  Ramsay, 
the  well-known  mining  engineer  and  operator,  of  Birmingham, 
Ala.,  has  devised  one  which  he  has  installed  at  a  number 
of  mines,  and  which  he  informs  the  writer  has  been  of  the 
greatest  value  in  maintaining  the  quality  of  coal  shipped  and 
at  small  cost.  For  sampling  of  cars  the  writer  has  this  sugges- 
tion to  make:  Since  at  most  modern  mines  and  most  coal 
yards  electric  power  is  available,  a  power-operated  boring  tool 
should  be  employed  in  coal  boring,  which  would  permit  a  section- 
ing of  the  coal  from  the  top  of  the  car  to  the  bottom,  and  also  by 
being  able  to  drill  through  lumps,  as  well  as  through  smaller 
material,  samples  could  be  gathered  which  it  would  seem  would 
be  more  truly  characteristic  than  to  attempt  to  pick  out  and 
crush  down  large  individual  lumps.  Such  a  device  might  consist 
of  a  revolving  bit  projecting  through  a  pipe  with  a  special 
auger  to  bring  up  the  cuttings.  The  cutting  edge  should  have 
the  same  diameter  as  the  exterior  of  the  pipe  inclosing  the 
auger.  Several  such  borers  might  be  set  up  on  a  movable 
framework  over  the  track  at  a  distance  from  the  tipple  or 
loading  house,  so  as  not  to  interfere  with  the  loading,  the 
sample  being  taken  while  the  car  is  momentarily  held.  Large 
consumers  of  coal  might  similarly  equip  the  track  leading  into 
the  coal  storage  yard. 

The  sampling  of  lump  coal  by  the  method  of  taking  out  a 
certain  proportion  of  large  and  small  pieces  involves  the  crush- 
ing down  of  one  part  in  two  or  three  thousand,  and  the  expense 
through  sampling  in  this  way  is  considerable.  In  sampling 
a  carload  of  the  usual  lump  coal  mixing  and  halving  could  pro- 
ceed until  probably  one  ton  was  obtained,  when  crushing  to 
4-inch  would  have  to  follow,  and  to  one  inch  at  the  next  halving. 
There  would  be  a  degradation  in  size  of  about  one  part  in  five 
thousand  of  the  lump  coal,  which  would  have  to  be  charged  to 
the  cost  of  sampling.  To  do  the  work  cheaply  and  efficiently 
mechanical  means  should  be  provided. 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE  707 

Factors  Determining  Quality 

There  are,  of  course,  other  factors  in  determining  the  quality 
of  a  coal  than  that  shown  by  a  chemical  analysis,  such  as  its 
friability.  Often  complaints  are  based  on  the  quantity  of  fines 
present  rather  than  the  percentage  of  ash  or  its  calorific  value 
in  B.  T.  U.  Again,  a  coal  may  be  satisfactory  for  a  low  tempera- 
ture house-heating  furnace  while  it  may  clinker  hopelessly  in  a 
steam  boiler  furnace,  so  that  ash  fusibility  must  be  added  to  the 
ordinary  "proximate"  analysis  to  make  the  story  more  com- 
plete. Simple  analysis  does  not  tell  the  story  of  whether  a  coal 
is  a  good  coking  coal  or  a  suitable  gas  coal,  but  here  knowledge 
of  the  district  from  which  the  coal  comes  determines  this  be- 
yond question.  While  fully  admitting  the  necessity  of  this 
prior  knowledge,  it  does  not  seem  to  the  writer  possible  to  main- 
tain the  standard  of  any  particular  kind  or  variety  of  coal  with- 
out good  sampling  accompanied  by  inspection  to  determine  (so 
far  as  visual  inspection  will  permit)  the  proportion  of  fine  coal 
to  coarse,  the  inspectors  judgment  being  checked  from  time  to 
time  by  screen  tests  of  considerable  samples. 

Certainly  visual  inspection  alone  is  not  satisfying  as  an  ulti- 
mate basis  for  coal  classification.  As  stated  by  Mr.  Hood,  there 
are  two  classes  of  information  about  coal — the  one  depends 
upon  observation,  judgment,  and  opinion  of  individuals,  having 
more  or  less  experience.  This  is  difficult  to  duplicate,  to  ex- 
press in  satisfactory  terms,  and  is  an  insecure  foundation  in 
case  of  disagreement.  The  other  depends  upon  physical  facts, 
expressed  in  figures,  which  can  be  duplicated  and  verified,  and 
when  properly  done,  is  independent  of  personality.  Neither  of 
these  methods  is  complete  in  itself;  neither  tells  the  whole 
story.  Even  when  both  are  available  and  well  practiced,  the 
value  of  a  coal  is  not  completely  disclosed,  since  practical  ex- 
perience in  using  the  fuel  is  needed  to  supplement  the  other 
information.  Granting  the  shortcomings  of  the  several  meth- 
ods, only  that  one  most  free  from  the  human  element  is  satis- 
factory as  a  basis  of  standards  of  classification.  This  means 
some  form  of  sampling  and  analysis. 

Export  Business 

The  necessity  of  utilizing  to  the  fullest  extent  the  number  of 
railroad  cars  and  the  shipping  facilities  during  the  war  led  to 


708         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  formation  of  the  "tidewater  pools,"  into  which  coals  of  a 
similar  quality  could  be  gathered,  so  that  approximately  the 
same  kind  of  coal  might  be  quickly  available  for  a  vessel  load- 
ing for  foreign  trade.  It  is  highly  important  that  the  coal  in 
these  pools  should  be  fairly  well  standardized,  as  in  this  case 
the  coal  may  come  from  a  mine  where  great  care  is  taken  in 
picking  and  loading,  or  from  another  mine  in  which  careless- 
ness is  shown,  although  the  coal  itself  may  be  all  right.  To 
meet  this  condition  the  right  sort  of  sampling  should  be  done, 
and  the  producers  should  be  paid  according  to  the  quality  of 
coal  furnished.  Also  there  should  be  certain  limits  of  quality, 
or  the  coal  should  not  be  permitted  to  be  dumped  in  the  par- 
ticular pool,  as  it  would  jeopardize  the  standing  of  the  coal  of 
that  pool. 

The  dumping  of  poor  coal  into  certain  pools  actually  occurred 
during  the  war.  Since  the  armistice  the  restrictions  have  been 
further  removed,  so  the  unsatisfactory  quality  of  the  respective 
pool  coals  has  been  the  occasion  of  open  comment  by  foreign 
buyers  and  admitted  by  those  familiar  with  the  facts.  In  spite 
of  this,  more  than  one-third  of  the  coal  exports  are  said  to  pass 
through  pools  at  this  time  on  account  of  this  advantage.  The 
only  alternative  is  the  assemblage  of  a  large  number  of 
cars  from  a  particular  mine  or  group  of  mines  of  the  same 
producer  until  a  vessel  is  available.  This  procedure,  however, 
ties  up  the  railroad  cars,  and,  as  often  the  coal  vessel  is  not  on 
hand  at  the  time  the  coal  is  assembled,  or  vice  versa,  leads 
to  heavy  demurrages;  but  it  is  used  by  leading  exporters  to 
protect  the  name  of  their  coal.  If  reasonable  standards  could 
be  maintained  the  pooling  system  is  logically  the  best  method 
of  handling  the  export  business,  and  the  question  arises  as  to 
how  shall  the  standardization  be  maintained — by  sampling,  or 
by  mere  visual  inspection,  which  has  proven  in  the  past  to  be 
inadequate.  The  problem  is  a  serious  one  at  the  present  time 
and  deserves  consideration  of  both  producers  and  buyers.  One 
suggestion  that  has  been  made  by  the  Fuel  Division  of  the 
Bureau  is  as  follows : 

Mines  to  Set  Standards 

It  is  proposed  that  each  mining  company  set  its  own  stand- 
ard of  quality  consistent  with  the  particular  vein,  preparation 


STANDARDIZATION  OF  COALS  FOR  THE  TRADE  709 

and  market  which  the  business  affords,  and  that  the  Govern- 
ment shall  publish  such  standard  and  certify  as  to  whether 
it  is  being  maintained  by  the  mining  companies.  Such  work 
would  not  replace  inspection  by  the  mining  companies.  It 
would  not  certify  as  to  the  quality  of  each  and  every  shipment, 
but  it  would  inspect  and  sample  at  irregular  intervals  a 
sufficient  number  of  cars  of  coal  as  shipped  to  indicate  whether 
the  declared  standard  of  the  mining  company  was  being  main- 
tained. 

Mines  entering  the  system  would  be  privileged  to  advertise 
that  their  product  was  from  a  mine  wrhose  standard  of  prepara- 
tion was  certified  to  by  the  Government.  In  case  coal  ship- 
ments were  sub-standard  the  mine  would  be  advised  of  the  fact. 
If  the  condition  continued,  the  facts  would  be  given  publicity 
and  the  mine,  to  retain  a  place  as  a  certified  mine,  would  be 
required  to  declare  a  new  and  different  standard  and  one  which 
its  product  could  meet. 

Operators  of  mines  entering  this  system  would  agree  to  allow 
shipments  to  be  sampled  en  route  at  thoroughly  equipped  me- 
chanical sampling  stations,  and  stand  any  added  expense  of 
transportation  and  handling  incident  thereto.  All  analyses 
would  be  published  from  time  to  time,  giving  accurate  informa- 
tion about  American  coals.  Mines  need  not  come  into  this 
system,  but  there  would  be  manifest  advantages  in  being  on  a 
Government-approved  list,  which  would  gradually  increase  the 
number  using  the  service. 

Frankly,  the  writer's  only  excuse  for  venturing  into  this  old 
field  of  controversy,  Sampling  vs.  Inspection,  is — first,  because 
he  was  invited  by  the  officers  of  your  Congress;  second,  be- 
cause of  his  interest  as  a  member  of  the  Bureau  of  Mines  in 
this  new  departure  of  our  country  in  entering  into  extensive 
overseas  export  of  coal. 

Export  Business  Would  Help  Industry 

It  is  believed  that  a  large  export  business  will  greatly  assist 
the  coal-mining  industry  of  this  country  and  at  the  same  time 
help  our  allies,  France  and  Italy,  especially  in  their  real  need, 
as  well  as  help  our  South  American  friends  and  neutral  coun- 
tries so  far  as  can  be  done  with  the  scarcity  of  shipping.  This 
is  a  time  when  Great  Britain's  export  trade  is  nearly  prostrate 


710         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

through  curtailment  of  the  hours  of  labor  in  the  mines  under 
the  Sankey  award,  and  Great  Britain  can  only  maintain  a 
limited  export  to  its  former  clients  by  depriving  its  own  people 
of  full  supplies  of  fuel. 

It  is  thought  that  the  export  business  peak  load  will  come  in 
the  spring  and  summer  months,  and  in  this  way  help  our  miners 
to  get  more  days'  work  in  a  week,  and  thus  help  solve  a  problem 
for  next  spring  and  summer. 

This  will  not  alone  benefit  the  Eastern  mines,  but  also  the 
Middle  West  mines  by  relieving  the  pressure  from  the  East. 

Must  Maintain  Export  Standard 

But  to  give  satisfaction  to  our  foreign  friends  we  must  main- 
tain the  quality  and  reputation  of  our  coal,  and  unless  we  do 
maintain  our  standards  we  are  going  to  lose  export  business 
which  should  naturally  be  ours  with  the  building  up  of  a  great 
shipping  industry.  Moreover,  we  all  have  an  interest  in  seeing 
that  these  ships  are  kept  busy  when  the  full  program  of  ship 
construction  makes  us  the  greatest  maritime  nation.  Raw  coal 
export  permits  the  extension  of  trade  generally,  as  instanced  by 
Great  Britain's  former  splendid  export  business. 

The  necessity  of  standardizing  our  coal  for  export  is  not  a 
theoretical  consideration;  even  with  our  present  small  export 
trade  we  have  already  had  to  apologize  for  shipments  which 
have  been  made. 

The  Bureau  has  been  invited  to  straighten  several  bad  cases ; 
therefore,  how  about  the  situation  when  our  export  of  coal  in- 
creases ten-fold?  Old  reliable  coal  exporters  are  as  much 
affected  or  more  than  new-comers  in  the  business,  because 
while  their  particular  coals  are  kept  up  to  their  standards  other 
American  coal,  if  no  control  is  exercised,  would  cast  a  stigma 
on  all. 

As  Director  Manning  of  the  Bureau  has  told  you,  the  Bureau 
will  gladly  assist  the  coal-mining  industry  in  standardizing  its 
coal  for  export,  and  likewise  for  business  at  home  when  there 
is  a  demand  for  it ;  but  the  former  calls  for  immediate  action 
if  The  American  Mining  Congress  can  carry  forward  to  fruition 
its  proposal  for  an  export  coal  corporation  to  embrace,  so  far  as 
they  are  willing,  all  exporters  of  coal. 


PRICE  FIXING  BY  THE  U.  S.  FUEL  ADMINISTRATION       711 


PRICE  FIXING  BY  THE  UNITED  STATES  FUEL 
ADMINISTRATION 

By  EDWIN  LUDLOW,  Consulting  Engineer,  New  York  City 

In  abnormal  times  such  as  produced  by  the  war  price  regu- 
lation of  the  necessaries  of  life  is  required,  but  such  regula- 
tion should  be  constructive  and  not  restrictive,  and  so  arranged 
that  when  the  necessity  for  such  regulation  no  longer  exists 
the  laws  of  supply  and  demand  may  again  assert  themselves 
without  financial  embarrassment  to  the  industry  or  unneces- 
sary expense  to  the  consumer  or  dealer. 

During  the  latter  part  of  1916  and  early  months  of  1917 
there  was  a  shortage  of  bituminous  coal,  due  to  the  unusual 
demand  of  all  industries  keyed  up  to  a  maximum  production 
of  war  materials.  This  caused  a  runaway  market,  when  con- 
sumers by  bidding  up  the  price  of  coal  brought  on  a  demoral- 
ization in  the  coal-using  industries. 

In  May,  1917,  a  committee  under  the  chairmanship  of  Mr. 
F.  S.  Peabody,  and  with  Secretary  of  the  Interior  Lane  as  a 
member,  had  numerous  meetings  with  operators  representing 
the  coal-mining  industry  of  the  whole  country,  and  on  June 
29,  1917,  announced  an  agreement  between  the  committee  and 
the  operators  fixing  a  tentative  maximum  price  throughout 
the  country  for  bituminous  coal  of  $3.00  per  ton  at  the  mines 
and  25  cents  per  ton  selling  commission.  This  plan  was  based 
on  the  idea  of  fixing  a  maximum  price  high  enough  to  greatly 
stimulate  production  and  yet  one  that  would  protect  the  manu- 
facturers from  the  excessive  prices  then  being  charged,  and 
without  violating  the  laws  of  supply  and  demand,  thus  per- 
mitting the  industry  to  readjust  itself  when  the  emergency 
passed  without  loss  or  disruption. 

Opposed  by  Departments 

This  plan,  while  welcomed  by  the  operators  and  the  con- 
sumers at  large,  was  violently  opposed  by  certain  Cabinet 
officers  whose  departments  were  large  users  of  coal,  and  finally, 
on  August  21,  1917,  prices  for  bituminous  coal  were  announced 
by  the  President  varying  from  $1.90  to  $3.25  for  mine  run  in 


712         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  various  districts.  These  prices,  and  also  to  a  large  extent 
the  opposition  of  the  Cabinet  officers,  were  due  to  misinforma- 
tion furnished  by  the  Federal  Trade  Commission,  which,  without 
expert  advice  and  with  meagre  data  obtained  mostly  from  a 
few  of  the  low-cost  coal  companies  in  each  district,  upset  the 
broad  constructive  policy  of  the  Lane-Peabody  Committee  and 
placed  a  large  percentage  of  the  operators  in  the  position  where 
they  must  produce  the  fuel  under  a  pecuniary  loss  and  have 
only  the  glory  of  a  patriotic  duty  performed  to  reward  them. 

As  these  prices  could  not  stimulate  production  and  bring  the 
fuel  the  country  needed  to  successfully  carry  on  the  war,  on 
August  23,  1917,  Dr.  Harry  A.  Garfield  was  appointed  by  the 
President  Fuel  Administrator,  with  full  power  as  to  all  fuel 
that  was  conferred  on  the  President  by  the  Lever  Act,  approved 
August  17.  From  this  date  until  January,  1918,  numerous 
revisions  and  adjustments  of  the  President's  prices  were  made 
in  the  hope  of  increasing  output,  but  no  general  verification 
of  costs  was  attempted. 

Bringing  Order  Out  of  Chaos 

Early  in  January,  1918,  the  Engineers'  Committee  in  the 
Fuel  Administration  was  formed,  and  the  whole  coal-mining 
industry  owes  a  vote  of  thanks  to  Messrs.  Guernsey,  Norris 
et  al.  for  their  great  work  in  bringing  order  out  of  chaos  and 
devising  a  system  for  carrying  out  the  Lever  Act  to  give  to 
producers  a  reasonable  profit  above  their  cost.  Mr.  Norris  has 
given  in  his  paper,  read  at  the  Colorado  meeting  of  the  Insti- 
tute of  Mining  Engineers  in  September,  1918,  a  full  account 
of  the  method  of  arriving  at  the  cost  in  each  district  and  the 
graphic  method  of  showing  the  same,  so  that  the  engineers 
were  able  to  draw  a  line  representing  the  price  necessary  to 
make  90  per  cent,  of  the  tonnage  mined  in  that  district  return 
at  least  the  cost  of  operation,  and  to  that  was  added  by  Dr. 
Garfield  the  profit  as  authorized  in  the  Lever  Act. 

The  method  adopted,  while  fair  to  the  operator,  was  at  the 
same  time  in  violation  of  the  law  of  supply  and  demand.  Coal 
containing  a  high  ash  and  of  inferior  quality  was  given  a 
selling  price  higher  than  coal  of  a  better  grade  formerly  sold 
in  the  same  region,  and  to  further  regulate  and  prevent  the 
demand  being  for  the  high-grade  coal  at  a  lower  price  a  zoning 


PRICE  FIXING  BY  THE  U.  S.  FUEL  ADMINISTRATION       713 

system  was  inaugurated  to  restrict  the  distribution.  The 
result  came  when  with  the  sudden  ending  of  the  war  in  Novem- 
ber, 1918,  and  the  withdrawal  of  the  zoning  system  and  price 
restrictions,  some  dealers  found  themselves  loaded  up  with 
inferior  coal  at  a  high  price,  while  their  competitors  who  had 
not  purchased  large  stocks  were  enabled  to  obtain  and  sell  a 
better  coal  at  a  lower  price.  This  represented  large  losses  to 
many  dealers,  and  all  of  these  troubles  would  have  been  obvi- 
ated if  the  Lane-Peabody  agreement  had  been  allowed  to  stand. 
How  near  right  that  agreement  was  was  brought  out  by  Mr. 
Norris  at  a  meeting  of  the  Washington  Section  of  the  Institute 
of  Mining  Engineers  when  he  stated  that  averaging  the  costs 
and  fixing  the  prices  in  all  the  bituminous  fields  of  this  country 
the  average  came  within  25  cents  of  the  figure  named  in  that 
agreement. 

In  the  anthracite  field  the  price  fixing  was  made  by  Presi- 
dential order  on  the  23rd  of  August,  1917,  the  day  Dr.  Garfield 
was  appointed,  and  with  the  exception  of  a  reduction  in  the 
price  of  pea  coal,  and  two  advances  granted  on  account  of  wage 
increases,  no  changes  were  made.  The  Engineers  of  the  Fuel 
Administration  took  up  the  anthracite  field  following  their 
work  in  the  bituminous,  and  Mr.  Norris  has  written  a  full 
account  of  the  method  used  in  a  paper  read  before  the  Ameri- 
can Institute  of  Mining  Engineers  in  February,  1919. 

The  fixing  of  the  prices  by  the  President  followed  the  prices 
given  in  the  circulars  issued  by  the  large  companies  with  one 
important  change,  that  the  individual  operator  was  continued 
the  right,  granted  in  June  by  the  Federal  Trade  Commission, 
to  charge  75  cents  per  ton  more  for  the  prepared  sizes  than 
could  certain  large  mining  companies  whose  names  were  pub- 
lished. This  on  the  ground  that  these  companies  either  con- 
trolled or  were  controlled  by  the  railroad  companies  who  han- 
dled the  output  of  their  mines.  If  this  was,  as  stated,  because 
these  companies  could  make  up  their  losses  from  their  rail- 
road earnings,  the  argument  falls,  as  the  railroads  were  taken 
over  by  the  Government,  and  any  claim  that  rates  charged 
on  anthracite  were  exorbitant  was  not  borne  out  from  the  fact 
that  nearly  the  first  act  of  the  Railroad  Administration  was  to 
raise  these  rates  25  per  cent,  where  the  advance  was  paid  by 
the  consumer,  and  from  100  per  cent,  to  700  per  cent,  when  it 


714         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

was  switching  work  at  the  mines  that  had  to  be  paid  by  the 
coal  company.  The  complication  of  25  per  cent,  of  the  tonnage 
being  shipped  at  75  cents  per  ton  higher  than  the  75  per  cent, 
shipped  by  the  large  companies  added  materially  to  the  work 
of  fixing  prices  for  the  dealers  who  bought  from  both  sources 
of  supply.  As  a  matter  of  fact,  a  large  proportion  of  this  75 
cents  was  absorbed  by  the  dealers  in  spite  of  all  efforts  of  the 
local  Fuel  Administrator  to  adjust  the  delivered  price  to  the 
consumers. 

First  Trouble 

The  first  real  trouble  to  the  operators  came  with  the  advance 
given  to  the  miners  on  December  1,  1917,  in  the  form  of  a  war 
bonus  ranging  from  60  cents  to  $1.10  a  day  for  laborers  and 
25  per  cent,  for  contract  miners.  The  estimate  made  by  the 
companies  was  that  the  labor  increase  alone  amounted  to  45 
cents  per  ton,  and  allowance  should  also  be  made  for  the  in- 
creasing cost  of  supplies  and  switching  charges.  The  Fuel 
Administrator,  however,  would  allow  only  35  cents  a  ton  to  be 
added  to  prices  of  all  sizes.  Subsequent  checking  of  the  actual 
results  showed  that  the  cost  had  been  increased  76  cents,  and 
the  operators  were,  therefore,  out  41  cents  per  ton. 

New  Wage  Demand 

The  demand  for  more  wages  from  the  miners  became  very 
insistent  in  the  latter  part  of  1918,  due  to  a  large  extent  to  the 
high  wages  paid  in  the  shipyards  and  munition  plants,  and 
especially  on  the  railroads  whose  employees  were  in  daily 
touch  with  the  miners,  and  on  November  1  a  second  war  bonus 
was  granted,  and  as  the  engineers  of  the  Fuel  Administration 
were  then  functioning,  this  advance  was  plotted  out  to  amount 
to  75  cents  per  ton  on  all  sizes;  and  as  it  was  felt  the  steam 
sizes  could  not  stand  this  increase,  the  amount  was  placed 
entirely  on  the  prepared  sizes  at  $1.05  per  ton.  No  allowance 
was  granted  for  the  deficit  in  the  former  allowance,  nor  for  the 
continually  rising  cost  of  supplies,  although  this  information 
was  all  placed  before  Dr.  Garfield  by  the  Engineers'  Committee, 
and  his  attention  called  to  the  fact  that  60  per  cent,  of  the 
anthracite  tonnage  was  being  mined  at  a  loss  when  selling 
expenses  and  interest  on  investment  were  considered. 


PRICE  FIXING  BY  THE  U.  S.  FUEL  ADMINISTRATION       715 

When  the  Fuel  Administration  on  February  1,  1919,  turned 
the  anthracite  industry  back  on  its  own  resources,  Dr.  Gar- 
field  made  the  statement  that  the  advances  given  had  not 
been  sufficient,  and  that  if  he  had  remained  in  office  he  would 
have  had  to  give  an  advance  of  50  cents  per  ton  to  save  from 
financial  embarrassment  many  of  the  companies  who  had 
patriotically  continued  to  mine  coal  at  a  loss.  The  anthracite 
industry  was  in  a  very  serious  condition.  The  urgings  of  the 
Fuel  Administration  had  caused  consumers  in  the  territory 
to  which  anthracite  was  restricted  to  put  in  two-thirds  of 
their  winter's  supply  in  the  summer  and  fall.  The  extremely 
mild  winter  had  not  made  it  necessary  to  burn  the  usual 
amount,  and  the  two-thirds  supply  was  found  sufficient  to  carry 
the  householder  through  to  spring.  The  closing  down  of  many 
munition  plants  had  released  large  quantities  of  bituminous 
coal,  and  the  demand  for  the  steam  sizes  of  anthracite  fell 
below  the  amount  produced  even  with  the  broken  time  that 
became  necessary.  Labor  and  material  costs  were  at  a  maxi- 
mum, and  labor  was  resting  from  the  strenuous  work  during 
the  war  and  taking  life  quite  easily,  doing  as  little  as  possible 
in  order,  as  frankly  stated,  to  have  the  mines  get  out  their 
weekly  allowance  of  coal  in  four  days  instead  of  three. 


Solving  the  Problem 

The  recommendation  of  Dr.  Garfield  that  50  cents  should  be 
added  to  the  price  was  made  at  a  time  when  there  was  very 
little  demand  for  coal  at  any  price.  The  markets  to  which 
anthracite  had  been  restricted  were  filled,  and  the  West  and 
Northwest,  usually  good  customers,  had  been  barred  from  re- 
ceiving anthracite  and  were  stocked  with  the  best  substitutes 
they  could  get.  The  anthracite  men  did  the  only  thing  left 
for  them  to  do.  Instead  of  making  the  usual  reduction  of  50 
cents  per  ton  for  stocking  expenses  on  April  1,  and  taking  this 
up  at  the  rate  of  10  cents  per  ton  per  month  to  the  first  of 
September,  they  made  the  April  price  the  then  winter  price, 
and  have  added  10  cents  per  ton  for  five  months,  until  on  Sep- 
tember 1  the  price  reached  what  Dr.  Garfield  said  his  examina- 
tions of  the  October  before  showed  him  it  should  be. 


716          PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Operators  Hard  Hit 

How  hard  the  anthracite  was  hit  by  the  price  fixing  is  shown 
in  the  testimony  of  Mr.  W.  T.  Thompson,  secretary  of  the 
Individual  Operators'  Association,  before  the  Senate  Investi- 
gating Committee.  He  stated  that  60  per  cent,  of  the  indi- 
vidual operators  had  reported  costs  and  revenue  from  January 
to  July  of  this  year,  and  that  the  average  of  them  all  was  a 
loss  of  32  cents  per  ton. 

We  have  come  to  another  era  of  price  fixing,  and  while  the 
present  emergency  warrants  a  price  regulation,  it  is  well  known 
and  should  be  considered  that  coal  cannot  be  produced  as 
cheaply  under  the  conditions  of  a  nation-wide  strike  as  when 
operations  are  normal;  that  expenses  have  to  be  met  in  such 
emergencies  that  would  not  ordinarily  arise,  and  it  would  be 
only  fair  to  those  operators  who  by  maintaining  the  great 
American  principle  of  the  open  shop  are  able  to  keep  the  rail- 
roads and  industries  alone  that  they  should  receive  fair 
remuneration,  as  without  them  we  would  be  at  the  mercy  of 
t{ie  Bolsheviki,  who  are  trying  to  turn  this  free  American 
Government  into  a  Russian  Soviet  tyranny. 

Judge  Gary  has  received  the  commendation  of  the  whole 
country  for  his  fearless  stand  for  the  open  shop ;  and  when  the 
miners  and  the  operators  again  meet  at  the  conference  table 
I  sincerely  hope  that  two  things  will  be  demanded  before 
negotiations  are  opened — first,  that  no  agreement  will  be 
entered  into  that  does  not  guarantee  the  open  shop;  and 
second,  that  before  any  labor  union  is  entitled  to  sign  an  agree- 
ment for  a  whole  industry  it  must  prove  its  responsibility  by 
incorporating  and  making  that  union  responsible  by  law  for 
the  carrying  out  of  its  contracts. 

We  are  facing  serious  times  that  must  be  met  by  a  united 
people,  or  we  will  find  this  country  in  the  grip  of  that  German 
invention,  the  Soviet  rule,  that  delivered  Russia  into  their 
hands,  and  by  which  they  are  now  trying  to  sap  the  industrial 
life  of  the  Allies,  who  defeated  them  on  the  field  of  battle. 

The  American  Mining  Congress  should  prove  its  American- 
ism by  stamping  in  the  strongest  terms  its  disapproval  of  the 
present  rule-or-ruin  policy  of  the  labor  unions. 


THE  INDUSTRIAL  CLEAN-UP  717 

THE  INDUSTRIAL  CLEAN-UP 
By  R.  DAWSON  HALL,  Managing  Editor  "Coal  Age" 

From  our  vantage  point  of  today,  we  are  apt  to  look  back  at 
the  construction  work  of  the  early  '90s  with  superior  wisdom  and 
a  degree  of  condescension.  We  are  little  disposed  to  remember 
the  general  conditions  of  the  country  at  the  time  the  work  of 
the  '90s  was  performed.  The  standard  of  comfort  was  very 
much  lower  than  it  is  today,  and  the  houses  which  we  now 
regard  as  being  inadequate  were  in  those  days  not  so  far  re- 
moved in  character  from  the  best  of  those  in  the  smaller  towns 
adjacent. 

Mining  villages  were  designed  and  erected  by  those  same 
people  who  designed  and  erected  the  houses  of  the  lumbermen 
in  the  wooded  areas  which  surrounded  the  coal  mines.  Mining 
was  in  many  cases  the  lumberman's  by-product  industry.  He 
bought  the  land  for  the  timber  that  was  on  it,  and  he  then 
discovered  that  there  was  coal  underneath  the  surface.  Hoping 
that  there  would  be  a  profit  in  its  development  he  started  up 
mines,  the  character  of  which  he  regarded  as  being  as  tran- 
sitory as  was  the  main  industry  in  which  he  was  engaged. 

Early  Conditions 

Indeed,  in  most  cases  this  idea  of  the  temporary  character  of 
mine  working  was  well  borne  out.  The  operator  usually  opened 
the  coal  which  appeared  above  the  level  of  the  streams,  and 
so  did  not  occupy  the  whole  area  of  the  tract  in  which  the 
coal  appeared.  Long  and  deep  ravines  often  cut  into  the  body 
of  the  coal  bed  and  made  it  necessary  to  make  long  detours 
on  the  outside  and  on  the  inside  of  the  mine.  As  a  result,  there 
were  usually  long  hauls  on  the  outside  of  the  mine  and  equally 
long  hauls  within,  from  the  point  of  view  of  the  state  of  the 
art  of  hauling  coal  in  that  early  period  of  the  industry. 

In  those  days  the  electric  locomotive  was  only  just  making 
its  appearance.  In  fact,  the  author  of  this  paper  was  an 
engineer  at  a  mine  which  installed  electric  locomotives  in  1892, 
and  was  one  of  the  pioneers  in  the  introduction  of  this  form 
of  transportation.  At  other  mines,  mules — sometimes  in 


718          PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

single  harness,  sometimes  in  string  teams  of  three  or  even 
more — furnished  the  motive  power.  At  that  time  the  rails 
were  quite  frequently  of  wood,  and  nobody  thought  that  it 
was  necessary  to  remove  the  soft  clay  between  the  ties  and 
replace  it  by  good  ballast.  The  grades  followed  the  ups  and 
downs  of  the  seams. 

In  consequence,  it  was  only  a  short  time  before  the  mine  had 
to  be  abandoned  because  the  cost  of  hauling  was  prohibitive. 
The  radius  of  action  of  these  early  mines  was  extremely  re- 
stricted, but  no  sooner  was  one  closed  down  than  another 
sprung  up  in  its  place,  for  the  mines  of  that  early  day,  cover- 
ing such  a  small  area,  left  opportunities  for  other  develop- 
ments in  the  neighborhood. 

Early  Process  Wasteful 

Another  reason  why  the  area  tributary  to  any  one  opening 
soon  became  exhausted  was  that  in  those  earlier  days  it 
was  customary  to  take  out  barely  50  per  cent,  of  the  coal. 
This  wasteful  process  is  not  general  now  in  the  mines  of  the 
Eastern  coal  fields,  though  it  is  still  practiced  in  Illinois  and 
Indiana  and  in  some  other  States. 

The  earlier  mines  were  all  situated  along  the  main  lines  of 
travel,  though  there  were  some  important  exceptions.  As  a 
result,  it  is  impossible  to  go  through  the  coal  regions  without 
being  confronted  by  these  relics  of  a  former  period  of  evolu- 
tion. Most  of  the  old  houses  have  not,  as  yet,  condescended 
to  efface  themselves.  They  are  still  an  eyesore  to  the  public, 
and  we  will  never  get  the  average  citizen  to  realize  that  there 
are  good  mining  towns  so  long  as  all  that  he  sees  along  those 
railroads  which  he  exclusively  travels  are  of  the  type  that 
were  constructed  in  and  around  1890. 

There  are  villages  of  a  totally  different  description  which  are 
to  be  found  along  roads  that  are  not  part  of  the  arteries  of 
travel.  Some  may  only  be  seen  by  traveling  in  an  automobile 
across  several  miles  of  desert.  Some  lie  in  the  deep  recesses 
of  valleys  and  canyons,  approached  by  grades  so  steep  that  no 
railroad  would  be  constructed  through  them  if  it  were  not 
made  for  the  sole  purpose  of  removing  the  raw  materials  of 
the  earth,  such  as  minerals  or  timber.  In  such  places  no  one 
would  think  of  constructing  a  permanent  through  line. 


THE  INDUSTRIAL  CLEAN-UP  71£ 

It  is  extremely  unfortunate  that  the  public  is  not  able  to  see 
these  villages,  because  they  are  more  than  ordinarily  desirable 
for  human  habitation.  Unfortunately,  there  is  no  personal 
need  on  the  part  of  those  who  live  along  the  main  avenues  of 
travel  to  make  improvements  in  the  houses  in  which  their 
workingmen  dwell,  because  it  is  always  easy  to  get  men  where 
men  are  continually  passing.  Secondly,  it  does  not  pay  to  spend 
a  great  deal  of  money  on  a  village  that  is  likely  at  any  time  to 
be  vacated,  and  therefore  is  apt  to  make  poor  returns  on  any 
investment  which  is  made  in  the  interest  of  its  development. 

However,  it  seems  extremely  likely  that  without  a  large 
investment  the  little  villages  along  the  main  lines  could  be  made 
much  more  presentable  than  they  have  hitherto  been,  and 
what  expense  is  involved  in  the  change  would  be  fully  returned 
in  the  better  character  of  the  men  thus  obtained.  That  men 
can  be  secured  without  good  houses  is  no  reason  why  better 
men  should  not  be  sought  by  holding  out  the  unquestioned  lure 
of  a  better  class  of  residence. 

Plea  for  Better  Homes 

For  the  sake  of  the  good  name  of  the  industry,  and  to  pre- 
vent the  charge  of  callous  indifference,  which  is  too  often 
brought  against  those  who  are  its  leaders,  something  should  be 
done  to  impress  on  the  companies  that  own  such  villages  that 
they  hurt  the  fair  name  of  the  coal-mining  industry  and  should 
for  the  sake  of  their  fellow-operators  inaugurate  a  clean-up 
campaign  in  which  the  houses  would  be  painted  and  the  ten- 
ants would  be  induced  to  make  gardens  and  lay  out  lawns  and 
keep  the  village  trim  and  tidy.  The  unfortunate  part  of  the 
problem  is  involved  in  the  fact  that  many  of  the  mines  along 
the  main  line  are  working  under  such  difficulties  that  only 
small  profits  can  now  be  made  from  them. 

The  hauls  are  long,  the  mines  have  been  poorly  laid  out, 
the  better  coal  has  been  extracted,  the  equipment  at  the  tipple 
is  not  such  as  will  produce  the  best  kind  of  coal,  and  accord- 
ingly there  are  not  funds  available  for  any  degree  of  ren- 
ovation, even  though  the  investment  would  show  a  considerable 
profit,  provided  the  mines  ran  with  any  degree  of  steadiness. 
Notwithstanding  the  fact  that  there  are  these  difficulties,  the 
attempt  should  be  made  to  induce  the  operators  of  these  main- 


720         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

line  mines  to  fall  in  with  the  other  operators  and  put  their 
villages  in  better  shape. 

Unsightly  Buildings 

In  many  cases  there  are  old  buildings  which  should  be  pulled 
down,  especially  around  the  mine  tipple.  It  is  remarkable  how 
many  mine  dumps  are  still  adorned  by  the  unsightly  gallows 
and  broken-down  trestles  by  which  they  were  originally  ex- 
tended. It  is  interesting  to  notice  how  many  power  houses 
have  been  partly  dismantled.  Whatever  is  not  in  use  and  is 
not  likely  soon  to  be  put  into  use  should  be  completely  torn 
down  and  every  effort  should  be  made  to  level  unsighly  piles. 
A  little  paint  on  the  tipple  will  often  do  a  great  deal  to  impress 
the  stranger  with  the  sense  of  the  self-respect  of  the  corpora- 
tion which  is  operating  the  mine  and  with  the  idea  that  here 
dwells  a  corporation  that  values  a  man's  labor. 

In  fact,  it  is  interesting  to  note  how  many  corporations  that 
are  committed  to  a  policy  of  village  beautification  seem  to 
desire  alone  to  make  the  village  a  thing  of  beauty  without 
making  any  attempt  to  start  up  their  project  by  using  a  little 
of  their  money  and  their  own  effort  in  cleaning  up  about  the 
plant. 

Welfare  Work 

I  am  far  from  believing  that  the  work  of  welfare  should 
have  no  relation  to  the  wife  and  children  of  the  men  employed. 
That  is  the  most  important  part  of  the  whole  scheme,  because 
the  women,  at  least,  have  a  greater  esthetic  taste  than  have  the 
men,  and  are  more  pleased  than  are  the  men  with  any  develop- 
ment in  this  direction.  Nevertheless,  it  must  be  remembered 
that  the  men  work  a  great  many  hours  around  the  surface 
plant,  and  it  is  by  no  means  a  lost  effort  to  make  the  plant,  as 
also  the  houses,  a  place  of  pride. 

The  co-operation  of  the  men  who  are  employed  around  the 
plant  can  surely  be  obtained  as  well  at  their  own  residences, 
for,  after  all,  all  the  work  that  is  done  around  the  tipple  toward 
such  improvement  is  done  in  company  time  for  which  the  man 
who  does  the  work  is  well  remunerated.  One  is  justified, 
therefore,  in  asking  him  to  work  at  making  things  neat  and 
shapely  whenever  he  happens  in  the  course  of  the  day  to  have 
a  few  spare  moments. 


THE  INDUSTRIAL  CLEAN-UP  721 

The  Colorado  Case 

Much  of  the  censure  which  is  brought  against  operators 
today  is  not  for  the  condition  of  their  own  houses,  but  for 
that  of  those  which  their  men  are  occupying  as  land  tenants 
of  the  company  or  as  house  tenants  of  others  or  as  owners  in 
fee.  The  predecessors  of  the  Colorado  Fuel  and  Iron  Company 
leased  land  to  their  men  and  permitted  them  to  put  up  such 
buildings  as  seemed  best  to  them.  The  temporary  dwellings 
that  these  land  tenants  chose  to  erect  were  of  a  character 
which  did  not  reflect  credit  on  the  company  by  whom  they 
were  leased,  and  in  the  recent  coal  strike  of  Southern  Colorado 
it  was  one  of  the  unfair  charges  brought  against  the  Colorado 
Fuel  and  Iron  Company  that  its  tenants  lived  in  houses  of  a 
miserable  description. 

As  the  facts  of  the  situation  were  never  properly  disclosed 
to  the  public,  and  as  the  papers  of  Colorado,  and  following 
them  the  papers  of  the  United  States,  were  by  no  means  dis- 
posed to  do  justice  to  the  corporation,  there  was  only  one  cure 
for  the  situation  and  that  was  to  dispossess  the  men  who 
were  living  in  these  houses.  This  seemed  to  the  corporation 
to  be  an  unjust  thing  to  do  in  view  of  the  fact  that  some 
money  had  already  been  expended  by  the  land  tenants,  even 
though  in  an  extremely  injudicious  and  insanitary  way. 

The  company,  therefore,  decided  that  if  there  was  to  be 
any  injustice  they  themselves  were  the  proper  parties  to  sub- 
mit to  it,  and  very  generously  consented  to  buy  the  houses 
at  any  valuation  which  they  could  induce  the  land  tenants 
to  accept.  In  a  case  such  as  this  there  will  always  be  found 
land  tenants  who  put  an  unreasonable  figure  upon  their  pos- 
sessions, and  prices  were  paid,  in  many  instances,  which  were 
distinctly  unfair,  even  granting  that  it  was  the  duty  of  the 
company,  which  it  was  not,  to  purchase  these  tenements  on 
the  land  leased  by  them  on  short-time  leases.  However,  the 
buildings  were  all  eventually  purchased.  In  time,  all  the  old 
houses  were  torn  down,  and  the  villages  in  most  cases  bear 
testimony  to  the  excellence  of  the  judgment  thus  exhibited, 
although  there  are  still  some  houses  left,  which  are  on  prop- 
erties not  owned  by  the  Colorado  Fuel  and  Iron  Company,  that 
are  more  or  less  of  an  eyesore  as  contrasted  with  the  pretty 
buildings  and  neat  gardens  of  the  house  tenants  of  the  Colorado 
Fuel  and  Iron  Company. 


722         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Company  Often  to  Blame 

However,  in  most  cases,  the  trouble  is  not  with  tenants  who 
have  erected  their  own  houses  on  the  land  of  the  operative 
company,  but  with  houses  which  were  in  existence  before  the 
company  purchased  the  property  and  with  houses  erected 
either  by  miners  or  others  on  the  property  of  other  people 
and,  therefore,  not  subject  in  any  way  to  company  control. 
There  are  always  difficulties  in  getting  rid  of  such  places,  but 
that  does  not  say  that  an  attempt  should  not  be  made  wherever 
such  conditions  exist. 

In  fact,  it  is  quite  frequently  the  case  that  around  the  rail- 
road stations  are  a  number  of  buildings  of  a  deplorable  char- 
acter which  should  be  wiped  out  if  possible.  If  the  operator  is 
not  prepared  to  buy  such  buildings  and  erect  others  in  their 
places,  or  leave  the  land  vacant,  there  is  still  a  possibility  that 
he  may  start  some  sort  of  clean-up  campaign  which  will  make 
the  citizens  themselves  feel  more  disposed  to  do  the  work 
that  is  desired. 

Mine  Owners  Should  Lead 

In  fact,  it  seems  that  operators  in  coal-mining  towns  should 
be  always  leaders  in  the  clean-up  campaign.  They  have  seen 
pretty  villages  and  they  know  what  can  be  done,  and  it  is 
really  up  to  them  to  express  to  the  citizens  their  ideas  of  what 
is  needed  to  make  a  town  of  which  the  citizens  will  be  proud. 

In  most  cases  there  is  no  disposition  on  the  part  of  the 
management  to  labor  on  the  creation  of  the  requisite  village 
pride. 

It  is  certain  that  within  many  of  the  Eastern  towns  the 
schools,  for  instance,  are  not  at  all  up  to  the  level  which  should 
be  desired,  and  the  operator  who  has  traveled  North,  South, 
East  and  West  in  the  United  States  knows  exactly  how  far 
the  little  red  schoolhouse  fails  to  measure  up  with  the  ideals 
of  the  commonwealth  and  to  accord  with  that  more  generous 
system  of  instruction  which  is  customary  in  the  mining 
"camps"  of  the  West  and  the  North. 

Unfortunately,  there  are  some  features  of  a  coal-mining 
town  which  can  only  be  mitigated.  Where  the  amount  of  rock 
brought  out  of  the  mine  is  of  small  quantity  there  need  not  be 
unsightly  dumps  at  the  mine-mouth  or  tipple,  for  there  is 


THE  INDUSTRIAL  CLEAN-UP  723 

always  room  and  opportunity  to  place  the  material  by  means 
of  motor  trucks  where  it  will  improve  the  village  and  the  roads 
by  which  the  village  is  approached.  In  many  cases,  however, 
the  rock  dump  is  so  large  that  no  disposition  of  the  rock  can 
be  made  except  to  pile  it  in  unsightly  masses.  But  there  is 
no  reason  why  these  should  not  be  made  smaller  and  more 
sightly  than  is  customary,  nor  is  there  any  reason  why  they 
should  not  be  high  and  wide  rather  than  numerous.  In  fact, 
with  the  high  rock  dump  the  material  is  disposed  of  with  a 
minimum  of  expense,  and  if  the  level  at  which  the  rock  is 
delivered  is  not  high  enough  for  expeditious  dumping,  there 
is  always  the  possibility  of  putting  in  a  hoist  which,  while  it 
concentrates  the  dump  area,  will  make  it  possible  to  dump  the 
material  with  less  expense. 

Avoiding  Fires 

Care  should  be  taken  that  such  dumps  do  not  catch  fire. 
They  may  seem  to  be  perfectly  free  of  carbonaceous  material, 
but  that  is  very  rarely  found  to  be  the  case  when  careful 
investigation  is  made.  Many  shales  contain  an  oil  which  burns 
quite  freely  when  the  necessary  heat  is  obtained  to  drive  it 
to  the  surface  of  the  rock.  To  avoid  such  annoying  fires,  for 
they  are  annoying  rather  than  destructive,  care  should  be 
taken  to  keep  the  brush  cut  around  the  foot  of  the  pile  and 
to  see  that  the  blacksmith  and  others  do  not  throw  hot  ashes 
where  they  can  fall  down  and  ignite  the  shale  and  bone  coal. 

The  boy  who  thaws  out  car-wheel  oil  and  the  dumper,  who  is 
naturally  anxious  to  keep  himself  warm  during  the  winter  days 
and  nights,  may  either  of  them  so  use  the  fires  which  they 
have  to  build  as  to  set  fire  to  the  dump.  They  are  quite  likely 
to  do  this  if  no  conveniences  are  given  to  them  for  preparing 
their  fire  where  it  can  do  no  harm.  Even  then  they  will  need 
to  be  warned  of  the  danger  of  throwing  hot  ashes  in  among 
the  rocks  on  the  dump.  By  the  use  of  steel  plates  under  the 
stoves  or  open  fires  which  they  use  a  certain  degree  of  pro- 
tection can  be  afforded. 

Other  annoyances  around  the  coal  mine  are  the  bone  piles 
and  the  ash  pile  of  the  boiler  house.  Bone  can  always  be  dis- 
tributed with  advantage  on  the  road,  and  in  some  places  it 
can  be  used  profitably  by  the  farmers  of  the  surrounding 


724         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

country  for  the  burning  of  lime.  In  any  case  it  should  not  be 
so  placed  that  it  is  liable  to  be  set  on.  fire  by  tramps  or  by 
spontaneous  combustion.  Motor  trucks  can  easily  be  used  to 
place  it  where  it  is  a  help  rather  than  a  hindrance. 

Ash  piles  should  not  contain  enough  carbonaceous  matter  to 
burn  even  when  red-hot  cinders  are  piled  upon  them,  but, 
unfortunately,  most  of  our  mines  are  not  so  equipped  that  the 
coal  is  burned  to  such  a  degree  as  to  remove  the  possibility 
of  further  combustion.  The  safest  way  is  to  haul  the  ashes 
away  as  fast  as  they  are  formed  and  use  them  judiciously  for 
road  building. 


Building  Better  Towns 

Perhaps  we  do  not  realize  how  important  is  the  matter  of 
building  sidewalks  in  mine  villages.  The  difference  in  the 
styles  of  clothing  in  the  cities  and  in  the  villages  of  the  coun- 
try is  due  very  largely  to  the  absence  of  sidewalks  in  the  latter 
and  the  presence  of  sidewalks  in  the  former.  The  general 
opinion  of  the  public  regarding  any  town  is  gauged  a  great 
deal  by  the  character  of  the  clothing  of  those  who  appear  at 
the  railroad  station.  Where  the  people  who  live  in  the  town 
can  only  approach  the  platform  of  the  station  by  wading  their 
way  through  the  mud  they  get  into  the  habit  of  making  their 
appearance  in  overalls  and  jumpers,  and  this  they  do  whether 
the  day  be  fine  or  the  reverse. 

Any  woman  who  wears  decent  clothes  is  labeled  at  once  an 
extravagant  spendthrift,  for  the  condition  of  the  roads  is  such 
that  such  garments  become  bedraggled  and  splashed  from  head 
to  foot  with  the  mire  of  the  roads.  We  cannot  preserve  city 
apparel  unless  we  are  willing  to  provide  city  conditions.  The 
drawback  of  a  town  with  muddy  streets  is  but  accentuated 
when  the  streets  are  not  properly  lighted  and,  consequently, 
the  residents  are  unable  to  pick  their  way  from  dry  spot  to 
dry  spot  and  so  keep  their  clothes  in  condition.  We  cannot 
ask  for  cleanliness  in  our  mine  villages  unless  we  provide  con- 
ditions by  which  that  cleanliness  may  be  obtained  without 
excessive  cost  and  effort.  It  is  of  no  use  to  talk  of  welfare  in 
a  town  where  provisions  have  not  been  made  such  that  welfare 
can  be  made  workable. 


THE  INDUSTRIAL  CLEAN-UP  725 

Time  for  a  Campaign 

It  would  appear  that  the  time  is  ripe  for  a  campaign  in  favor 
of  an  industrial  clean-up.  There  has  been  a  great  deal  of  good 
work  done,  but  it  has  not  been  general,  and  the  industry  has 
gained  very  little  by  what  has  been  done,  the  reason  being 
that  the  public  does  not  see  the  good  work  that  has  been 
accomplished.  It  passes  along  highways  where  it  is  impos- 
sible to  observe  the  improvement,  and  whenever  there  is  a 
strike  it  is  always  possible  for  the  mine  workers  to  feature 
those  plants  where  the  least  degree  of  welfare  work  has  been 
provided. 

If  we  would  capitalize  the  development  in  mining  towns,  we 
must  do  so  by  making  it  general.  For  this  we  need  a  cam- 
paign. An  effort  should  be  made  to  interest  all  those  who 
have  not  taken  up  work  of  this  character  to  do  so  for  the  good 
of  the  industry.  Many  of  the  improvements  have  been  made, 
it  is  true,  for  the  purpose  of  securing  workingmen  from  the 
less  desirable  mines  by  giving  them  better  social  conditions  at 
the  plants  which  were  seeking  men. 

There  was  a  tendency,  therefore,  to  exploit  the  difference 
between  the  good  coal  camp  and  the  poor  coal  camp.  It  is  to  be 
questioned,  however,  whether  that  is  the  right  attitude,  and 
whether  it  would  not  be  better  for  the  industry  if  an  attempt 
should  be  made  to  interest  everybody  in  welfare  work 
whether  they  have  plenty  of  men  or  few.  After  all,  the  camps 
along  the  main  line,  which  are  occupied  often  by  a  lot  of 
unprincipled  working  men,  would  be  much  better  off  if  they 
were  to  obtain  men  of  the  character  which  are  to  be  found  in 
mines  having  better  living  conditions.  In  short,  a  cry  should 
go  forth  from  the  mining  industry  to  the  owners  of  undesirable 
mines :  "Clean  up  for  the  good  of  the  industry.  Let  the  people 
see  us  as  we  are  and  not  as  the  least  comely  of  us  are." 


726         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

WORK  OF  THE   TARIFF   COMMISSION 

Address  by  MR.  E.  P.  COSTIGAN,  Member  U.  S.  Tariff  Commission 

Though  important  and  related,  the  subject  assigned  to  me 
for  this  conference  is  somewhat  collateral  to  the  main  discus- 
sion. From  this  charge  I  plead  immunity.  Coming  here  with 
the  purpose  of  profiting  as  a  listener,  I  received  but  day  before 
yesterday  an  invitation  to  speak  to  you.  However,  as  a  member 
of  the  Tariff  Commission  and  as  a  western  man,  deeply  inter- 
ested in  the  prosperity  of  the  trans-Mississippi  region,  and 
particularly  the  mining  industry,  I  am  glad  to  appear  infor- 
mally to  request  the  co-operation  of  the  industrial  leadership 
you  ably  represent  with  the  work  of  the  Tariff  Commission. 

In  order  that  the  Tariff  Commission  may  most  efficiently 
serve  the  purpose  'for  which  it  was  created,  it  is  desirable  that 
industrial  leaders  in  every  field  should  know  something  of  the 
Commission's  authority,  the  nature  of  its  activities,  and  the 
means  through  which  co-operation  with  its  work  may  best  be 
promoted.  Doubtless  such  information  would  already  be  gen- 
erally distributed  but  for  the  fact  that  the  Commission  was 
organized  in  April,  1917,  a  few  days  prior  to  the  beginning  of 
our  country's  active  participation  in  the  world  war.  Though 
the  Commission  has  been  continuously  engaged  from  then  until 
now  at  its  special  tasks,  its  investigations  have  naturally  been 
subordinated  to  the  more  immediate  demands  resulting  from 
that  fateful  conflict. 

Purposes  of  the  Legislation 

Congress  specifically  provided  for  the  Tariff  Commission  in 
the  Revenue  Act  of  September  8,  1916.  The  law  was  adopted 
after  careful  consideration  and  discussion,  in  the  course  of 
which  its  advocates,  without  respect  to  party,  assigned  certain 
significant  reasons  in  support  of  its  enactment.  One  of  these 
reasons  was  the  indispensability  of  maintaining  a  permanent 
and  unbiased  governmental  body,  equipped  to  assemble,  for 
continuous  and  current  use,  and  to  scrutinize  and  report  in 
scientific  spirit  all  facts  of  tariff  significance  which  are  perti- 


WORK  OF  THE  TARIFF  COMMISSION  727 

nently  related  to  the  countless  articles  which  are  or  may  become 
subject  to  revenue  legislation.  Another  and  closely  related 
reason  was  the  wisdom  of  relying  less  on  the  hasty  and  more 
or  less  one-sided  tariff  hearings  on  which  Congressional  com- 
mittees in  times  past  have  often  inevitably  depended,  by  build- 
ing future  legislation  on  the  foundation  of  far  more  carefully 
compiled  and  accurate  information,  both  extensive  and  inten- 
sive, especially  in  highly  technical  subjects.  A  third  was  the 
importance  of  preparing  to  meet  post-war  conditions  by 
accumulating  through  some  official  agency  whatever  interna- 
tional tariff  data  will  best  assist  us  nationally  in  adapting  our- 
selves to  those  changed  industrial  problems  of  the  world  which 
are  certain  before  long  to  seek  some  solution  or  relief  in  newly 
formulated  commercial  treaties. 

Nature  and  Authority  of  the  Commission 

With  these  and  similar  objects  in  view,  the  Revenue  Act  of 
1916  provided  for  a  Commission,  without  administrative 
powers,  which  was  none  the  less  designed  on  permanent  lines, 
in  contradistinction  to  the  temporary  boards  which  have  here- 
tofore rendered  occasional  assistance  to  Congress.  Its  intended 
permanence  was  emphasized  by  a  clause  in  the  law  looking 
toward  continuing  annual  appropriations  and  by  a  provision 
for  the  appointment  of  its  members  for  successive  twelve-year 
terms.  Its  non-partisanship  was  sought  to  be  safeguarded  by 
the  requirement  that  not  more  than  three  of  the  six  commis- 
sioners should  be  members  of  any  one  political  party.  And  its 
investigating  functions  were  clearly  specified. 

Under  the  Act  creating  it,  the  Commission  co-operates  with 
and  in  return  receives  the  co-operation  of  other  governmental 
departments  and  establishments,  and  it  is  given  the  amplest 
power  to  summon  witnesses  and  compel  the  production  of  all 
necessary  papers,  books  and  documents. 

In  addition,  the  Commission  is  expressly  authorized  to  inves- 
tigate and  report  on : 

Such  special  subjects  as  may  be  referred  to  it  by  the  Presi- 
dent, the  Ways  and  Means  Committee  of  the  House  of  Repre- 
sentatives, the  Finance  Committee  of  the  Senate  or  by  either 
House  of  Congress ; 

The  administration  and  fiscal  and  industrial  effects  of  the 


728         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

customs  laws  of  this  country  now  in  force  or  which  may  be 
hereafter  enacted ; 

The  relations  between  the  rates  of  duty  on  raw  materials 
and  finished  or  partly  finished  products ; 

The  effects  of  ad  valorem  and  specific  duties  and  of  com- 
pound specific  and  ad  valorem  duties ; 

All  questions  relative  to  the  arrangement  of  schedules  and 
classification  of  articles  in  the  several  schedules  of  the  customs 
law; 

The  operation  of  customs  laws  alike  in  relation  to  the  Federal 
revenues  and  their  effect  upon  the  industries  and  labor  of  the 
country ; 

The  tariff  relations  between  the  United  States  and  foreign 
countries,  with  authority  to  prosecute  any  necessary  inquiry 
either  through  the  commissioners  themselves  or  the  Commis- 
sion's agents  in  any  part  of  the  United  States  or  in  any  foreign 
country ; 

Commercial  treaties,  preferential  provisions  and  economic 
alliances,  including  the  Paris  Economic  Alliance  of  1916,  and 
similar  organizations  and  arrangements  in  Europe ; 

The  effect  of  export  bounties  and  preferential  transportation 
rates; 

The  volume  of  importations  compared  with  domestic  produc- 
tion and  consumption ;  and 

Conditions,  causes  and  effects  relating  to  competition  of 
foreign  industries  with  those  of  the  United  States,  including 
dumping  and  cost  of  production. 

Primarily  an  Investigating  and  Reporting  Agency 

Different  legislative  proposals  having  in  view  a  broadening 
of  the  duties  of  the  Commission  in  various  directions  are  at  this 
time  under  consideration  in  Congress,  but  it  is  clearly  the  Com- 
mission's primary  function  to  serve  as  a  fact-investigating  and 
fact-reporting  body.  Devoid  alike  of  administrative  responsi- 
bility and  rate-making  tariff  powers,  the  Commission  is,  above 
all,  concerned  with  the  accumulation  of  accurate  data  having 
industrial  significance  for  the  use  of  Congress  and  the  Presi- 
dent. It  follows  that  the  Commission  is  seeking  and  prepared 
to  welcome,  subject  of  course  to  verification,  not  only  precise 
information  on  ultimate  competitive  conditions,  but  also  co- 


WORK  OF  THE  TARIFF  COMMISSION  729 

operative  suggestions  and  intimations  as  to  those  methods 
which  will  best  assure  the  most  helpful  and  dependable  com- 
pilation of  facts  for  legislative  and  executive  consideration. 

An  impression  of  the  manner  in  which  the  Commission  has 
so  far  discharged  its  obligations  will  perhaps  be  best  formed 
from  specific  illustrations. 

Commission  Reports — Padlock  or  Interim  Legislation 

Immediately  after  its  organization  in  April,  1917,  the  Com- 
mission in  response  to  an  official  request,  reported  to  the  Ways 
and  Means  Committee  in  favor  of  so-called  "padlock"  or 
"interim"  legislation  as  a  means  of  providing  considerable 
revenue  to  the  Government,  without  adding  to  the  burdens  of 
consumers,  in  periods  when  Congress — as  was  the  case  when 
the  Commission's  report  was  made — is  considering  increases  in 
internal  revenue  taxes  and  tariff  duties.  The  Commission 
directed  attention  to  the  large  importations  under  existing 
lower  rates,  which,  during  our  history,  have  regularly  occurred 
prior  to  the  enactment  of  such  laws,  in  the  interim  while 
increases  in  taxes  and  duties  are  under  consideration  by  Con- 
gress. The  report  demonstrates  that  the  goods  thus  hurriedly 
drawn  into  the  channels  of  trade  are  thereafter  retailed  at 
prices  raised  to  consumers  by  the  amount  of  the  subsequently 
imposed  taxes  or  duties,  although  the  Government  has,  in  fact, 
not  collected  such  increases.  The  Commission  advised  for  the 
future  the  adoption  of  legislation  whereby  such  anticipated 
increases,  if  finally  enacted,  shall  become  effective  from  a  date 
preceding  the  enactment  of  the  law,  to  be  determined  by  the 
Ways  and  Means  Committee  of  the  House  of  Representatives. 
The  report  made  clear  that  such  public  revenue  safeguards  are 
regularly  given  by  corresponding  legislation  in  many  European 
countries,  and  that  bona  fide  outstanding  contracts  need  not  be 
endangered  by  such  legal  provisions.  It  will  be  observed  that 
the  Commission's  report  bore  no  relation  whatever  to  protec- 
tion or  free  trade,  yet  was  responsive  to  an  investigation  of  the 
bearing  on  the  federal  revenues  of  the  operation  of  our  customs 
laws.  The  Commission  established  that  such  a  law,  without 
increasing  the  consumer's  burdens,  from  customs  duties  alone 
would,  in  1897,  have  added  approximately  $74,000,000  to  the 
Treasury  of  the  United  States ;  that  in  1909  other  large  and 


730         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

available  sums  were  similarly  passed  by,  and  that  many  millions 
of  dollars  more  would  have  been  likewise  collectable  without 
added  public  cost  in  such  a  year  of  increased  internal  revenue 
taxes  as  the  war  with  Spain  in  1898.  Needless  to  say,  in  1917 
such  a  general  statute  would  have  served  similar  valuable  ends, 
especially  in  the  field  of  internal  revenue  tax  increases. 

Revision  and  Codification  of  Customs  Administrative  Laws 

Another  example  of  investigations  which  committees  of  Con- 
gress, with  their  many  responsibilities,  find  little  time  exhaust- 
ively to  pursue,  and  for  which  a  Federal  investigating  body  has 
unusual  qualifications,  may  be  cited  in  the  Tariff  Commission's 
report,  now  in  the  hands  of  the  Ways  and  Means  Committee, 
on  the  "Revision  of  the  Customs  Administrative  Laws  of  the 
United  States."  Here,  again,  is  a  recommendation  of  impor- 
tant revenue  legislation  of  a  non-partisan,  and,  in  the  main,  a 
non-controversial  sort.  The  Commission  devoted  many  months 
to  the  detailed  investigation  of  the  customs  administrative  laws 
in  this  country.  Many  of  these  laws  are  antiquated ;  others  are 
inconsistent,  overlapping  and  obscure.  Certain  of  these  stat- 
utes were  designed  to  meet  conditions  of  the  eighteenth  century 
which  no  longer  prevail.  Some  of  them  by  general  consent 
impose  at  the  present  time  on  our  commerce  conditions  of 
undesirable  and  even  inexcusable  severity.  Yet  no  complete 
revision  has  been  undertaken  since  1799,  and  the  one  partial 
legislative  attempt  in  that  direction,  which  occurred  in  1890, 
left  much  to  be  desired.  The  Commission  approached  the  task 
without  preconceptions.  Aided  by  administrative  experts,  it 
invited  into  conference  representatives  of  the  Government,  the 
public  and  of  business  chiefly  interested  in  the  problems  at 
issue.  As  a  result  of  constructive  criticism  and  prolonged  con- 
sideration, it  evolved  suggestions  for  the  uniform  codification 
of  our  customs  administrative  laws  greatly  simplyfying  and 
reducing  in  bulk  the  outstanding  legislation.  This  proposed 
revision  has  been  submitted  to  Congress  in  columns  conveni- 
ently parallel  with  the  existing  laws.  The  compilation,  as  a 
whole,  represents  the  consensus  of  well-informed  opinion,  both 
in  government  and  business  circles,  with  reference  to  funda- 
mental legislative  requirements  for  the  installation  of  a  thor- 
oughly modern,  efficient  and  acceptable  administration  of  our 


WORK  OF  THE  TARIFF  COMMISSION  731 

customs  laws,  regardless  of  any  tariff  duties  Congress  may  see 
fit  to  enact. 

As  illustrations  of  changes  recommended  by  the  Commission, 
which  are  approved  with  practical  unanimity  on  all  sides,  may 
be  mentioned  less  drastic  rules  controlling  the  payment  of 
drawbacks ;  the  lessening  of  the  number  of  bonds  required  from 
importers  to  a  minimum  consistent  with  the  safety  of  the 
public  revenues ;  the  more  liberal  use  of  bonded  warehouses  so 
that  articles  under  proper  supervision  for  the  due  collection  of 
duties,  may  be  freely  handled,  sorted,  manipulated  and  manu- 
factured; the  sanction  cf  direct  shipments  of  articles  to  their 
destination,  with  provision  for  appraisement  at  such  points; 
the  authorized  recovery,  on  proof  of  good  faith,  of  excess  duties 
collected  in  cases  of  unintentional  overvaluation,  or  by  way  of 
penalty  for  unintentional  undervaluation,  in  making  entry  of 
merchandise ;  and  the  proposed  rearrangement  of  the  bases  on 
which  dutiable  values  are  determined,  so  that  foreign  market 
value  and  the  American  selling  price  will  both  precede,  and  in 
that  order,  the  ascertainment  of  the  foreign  cost  of  production 
of  articles  requiring  appraisement.  Of  much  importance,  also, 
is  the  recommendation  that  the  appointment  of  collectors  and 
certain  other  customs  officials  shall  be  transferred  from  the 
President  to  the  Secretary  of  the  Treasury,  thereby  introducing 
a  promise  of  enlarged  efficiency  and  invoking  the  standards 
and  safeguards  of  the  Civil  Service  in  these  administrative 
positions. 

Foreign  Trade  Zones 

A  third  inquiry  of  general  interest  resulted  in  the  Commis- 
sion's report  on  foreign  trade  zones,  more  commonly  known 
abroad  as  "free  zones."  This  investigation  also  was  the  out- 
growth of  scrutiny  of  the  operation  of  our  customs  laws. 
Foreign  trade  zones,  which,  as  such,  have  nothing  whatever  to 
do  with  a  country's  tariff  rates,  are  limited  areas  outside  of, 
but  adjacent  to,  customs  ports,  wherein  merchandise  may  be 
freely  handled  without  being  subject  to  ordinary  customs  duties 
or  supervision  unless  the  merchandise  actually  starts  to  move 
out  of  the  zone  and  to  enter  the  customs  gates.  Such  zones  have 
been  found  serviceable  abroad,  notably  at  Hamburg  and  Copen- 
hagen, as  instrumentalities  for  the  promotion  of  foreign  trade. 


732         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

They  offer  particular  facilities  for  the  trans-shipment  of  a  con- 
siderable part  of  the  world's  commerce  through  the  centraliza- 
tion of  merchandise  at  convenient  points ;  its  re-handling  there, 
and  its  subsequent  distribution.  There  is  reason  to  expect  that 
such  zones  may  prove  useful  to  the  United  States  under  the 
changed  conditions  and  the  new  financial  relations  among  the 
results  of  the  war  affecting  foreign  commerce. 

The  Commission,  after  a  careful  and  exhaustive  examination 
of  the  use  of  such  zones  abroad  and  their  constitutionality  and 
practicability  here,  has  recommended  the  enactment  of  permis- 
sive legislation  under  which  States  or  political  subdivisions, 
subject  to  general  safeguards,  to  be  defined  by  the  Secretary  of 
Commerce,  for  adequate  construction,  fair  charges,  equal  treat- 
ment and  public  utility  service  may,  if  they  desire,  without 
expense  to  the  Federal  Government,  set  up  such  commercial 
machinery.  It  may  be  added  that  bills,  on  which  the  Tariff 
Commission  by  request  has  reported,  providing  for  such  foreign 
trade  zones,  are  now  pending  in  Congress. 

Dumping  and  Unfair  Foreign  Competition 

As  stated,  the  Commission  is  directed  by  law  to  investigate 
the  dumping  of  foreign  goods  in  this  country.  Accordingly  it 
has  recently  filed  with  the  Ways  and  Means  Committee  a  report 
not  only  on  that  subject  but  also  on  other  unfair  foreign  com- 
petition, including  a  report  on  the  operation  of  the  pioneer  anti- 
dumping law  of  Canada.  In  this  report,  the  Commission  reviews 
the  anti-dumping  legislation  of  the  United  States,  Canada, 
Australia  and  the  Union  of  South  Africa,  the  only  countries  which 
have  'so  far  enacted  special  statutes.  The  report  carefully  defines 
dumping  and  related  usages,  and  distinguishes  dumping  and 
other  unfair  practices  from  ordinary  instances  of  severe  com- 
petition. In  this  connection  the  Commission  has  compiled  many 
definite  complaints  of  recent  dumping  practices  by  representa- 
tive American  business  firms.  Included  in  the  Commission's 
report  are  certain  findings  resulting  from  a  special  investiga- 
tion on  the  operation  of  the  Canadian  anti-dumping  law  con- 
ducted by  the  Commission  in  Canada  in  1918.  On  the  assump- 
tion that  the  anti-dumping  Act  of  Congress  of  1916  expresses 
the  settled  legislative  purpose  of  Congress  to  restrict  dumping 
in  the  United  States,  the  Commission  concludes  its  review  of 


WORK  OF  THE  TARIFF  COMMISSION  733 

the  subject  by  recommending  to  Congress  the  enactment  of 
additional  legislation  cautiously  hedged  about  and  made  as 
elastic  as  possible,  in  the  interest  of  the  consuming  public, 
either  along  the  lines  of  the  Canadian  law  or  by  authorizing  the 
President  or  Secretary  of  the  Treasury,  pursuant  to  suitable 
official  findings,  to  impose  additional  duties,  or  even  refuse 
entry  of  articles  when  unmistakable  and  industrially  destruc- 
tive dumping  threatens. 


War  Disturbances  of  Industry 

The  European  war,  even  prior  to  our  entry,  profoundly 
affected  our  foreign  commerce  and  the  demands  for,  and  condi- 
tions of,  our  domestic  production.  The  industrial  results  of  the 
war  were,  therefore  early  selected  by  the  Commission  as  sub- 
jects for  inquiry.  Among  the  articles  under  this  head  to  which 
the  Commission  gave  particular  attention  may  be  noted :  Dyes 
and  coal  tar  chemicals  with  special  reference  to  the  production 
of  necessary  textiles  and  munitions ;  optical  glass  and  chemical 
glassware ;  surgical  instruments ;  the  brush  industry ;  the  but- 
ton industry ;  among  textiles  the  silk  industry  and  such  indica- 
tive articles  as  cotton  Venetians  and  chamoisette  gloves;  and 
such  war  minerals  as  quicksilver,  chromite,  manganese,  tung- 
sten and  magnesite.  The  Commission,  it  may  be  added,  has  in 
preparation  and  expects  soon  to  publish  a  volume  exclusively 
devoted  to  the  consideration  of  the  more  important  war 
minerals. 

On  each  of  these  groups  the  Commission  has  reported  sepa- 
rately. Both  because  of  their  outstanding  significance  and  as 
part  of  the  analysis  of  Schedule  "A"  of  the  present  tariff  law, 
dyes  and  related  coal-tar  chemicals  were  early  made  objects  of 
exhaustive  consideration.  For  one  thing,  the  Commission,  by 
direction  of  the  President,  has  already  taken  a  census  for 
1917  and  1918  showing  the  domestic  production  and  consump- 
tion of  coal-tar  chemicals.  The  Commission  has  also  submitted 
to  Congress  a  detailed  description  of  possible  loopholes  in  the 
Dye-Stuffs  Act  of  1916.  The  report  was  directed  to  the  better 
realization  of  the  intent  of  Congress  as  expressed  in  that  act. 


734         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Foreign  Tariff  Surveys 

The  world-wide  war  disturbances  of  various  industries  are 
closely  related  to  the  foreign  tariff  problems  on  which  the  Com- 
mission is  also  required  to  report.  With  the  war's  radical  inter- 
ference with  the  course  of  trade  between  Europe  and  America, 
Japanese  competition  in  various  lines  acquired  an  unexpected 
importance.  The  Commission,  as  part  of  its  survey  of  foreign 
competitive  conditions  and  tariffs,  has  given  attention  alike  to 
the  tariff  system,  the  industrial  development  and  the  trade  of 
Japan,  and  hopes  at  an  early  date  to  supplement  its  informa- 
tion from  first-hand  inquiry  recently  made  in  that  country. 
With  similar  regard  for  Far  Eastern  conditions,  the  tariff 
systems  of  Siam  and  China  and  the  development  of  China's 
foreign  trade  have  been  reviewed.  A  comprehensive  report  on 
colonial  tariffs  throughout  the  world  is  also  well  advanced,  and 
especial  attention  has  been  given  to  the  British  policy  of  im- 
perial preferences. 


Commercial  Treaties 

Another  important  result  of  the  study  of  our  foreign  rela- 
tions well  under  way  is  the  compilation  by  the  Commission  of 
a  world  digest  of  commercial  treaties.  It  is  intended  that  this 
digest,  after  it  is  published,  shall  be  regularly  supplemented  so 
that  it  may  remain  easily  accessible  and,  so  far  as  possible, 
permanently  complete. 

Doubtless  in  this  connection  mention  should  be  made  of  the 
Commission's  fairly  recent  report  on  * 'Reciprocity  and  Com- 
mercial Treaties,"  which  exhaustively  surveys,  both  historically 
and  with  statistical  evidence,  our  past  reciprocity  experiences, 
and  which  also  closely  examines  European  tariff  uses  and 
methods.  As  part  of  this  study  the  employment  of  the  "most 
favored  nation"  clause  in  commercial  treaties  is  analyzed.  The 
report  contains  the  conclusions  reached  by  the  Commission  in 
consequence  of  this  review,  the  most  important  of  which  is  the 
recommendation  of  the  adoption  of  equality  of  treatment — 
safeguarded  when  necessary  by  retaliatory  tariff  action  against 
countries  which  deny  the  United  States  equality  in  return — as 
the  foremost  principle  in  directing  America's  future  commer- 
cial policies. 


WORK  OF  THE  TARIFF  COMMISSION  735 

Costs  of  Production 

Costs  of  production  both  at  home  and  abroad  have  long 
figured  prominently  in  tariff  discussions,  and  the  Commission 
has  not  failed  to  prepare,  and  in  some  cases  to  make,  investiga- 
tions in  this  field.  Significant  comparative  costs,  so  far  as 
possible,  must  be  tabulated  with  similar  units  of  production  in 
view,  and  such  investigations  are  much  more  involved  and 
difficult  of  standardization  than  mere  lists  of  comparative 
wages  suggest.  The  war  introduced  such  abnormal  features 
into  production  that  these  inquiries  have  not  had  for  the  time 
being  the  same  urgent  quality  or  immediate  usefulness  which 
might  ordinarily  attach  to  them.  However,  the  Commission 
has  succeeded  in  preparing  a  thorough  report  on  costs  in 
the  sugar  industry  and  has  made  some  headway  in  such  fields 
as  cork,  silks,  conversion  costs  of  cotton  cloth  and  cotton  yarn, 
and,  to  a  more  limited  extent,  the  wool-growing  and  chemical 
industries.  Other  similar  investigations  are  proceeding  at  the 
present  time.  Incidentally,  some  of  these  investigations  have 
tended  to  shed  light  on  the  diverse  operation  of  specific  and 
ad  valorem  duties  and  on  the  desirability  of  revising  many 
inconsistencies  and  inequalities,  both  in  existing  classifications 
and  in  other  phases  of  tariff  legislation. 


Tariff  Information  Surveys 

Without  further  prolonging  the  discussion  of  separate  phases 
of  the  Commission's  work,  some  comment  should  be  included 
on  that  part  of  its  performance  which  in  many  respects  prom- 
ises to  be  the  most  extensive,  continuous  and  highly  serviceable. 
This  is  the  accumulation,  item  by  item,  of  systematically  con- 
densed, verified  and  thoroughly  current  tariff  information  of  a 
fairly  complete  sort  with  respect  to  thousands  of  articles  liable 
to  tariff  duties  embraced  in  the  various  schedules  and  even  the 
free  list  of  our  tariff  laws. 

From  the  outset  the  Commission  undertook  the  patient  and 
careful  assembling  of  precisely  this  sort  of  material — a  long 
series  of  tariff  surveys  of  separate  articles  which  together  con- 
stitute the  beginning  and  are  the  forerunner  of  a  tariff  encyclo- 
pedia. The  detailed  and  increasingly  expert  knowledge  called 
for  in  a  large  part  of  this  labor  is  such  that  committees  of  Con- 


736         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

gress  have  few  facilities  and  find  little  opportunity  for  pursu- 
ing it.  Indeed,  it  calls  for  a  high  order  of  specialized  and  tech- 
nical equipment,  proceeding  often  for  a  long  period  of  time 
under  impartial  guidance.  This  is  largely  due  to  the  growing 
complexity  and  obscurity  of  competitive,  commercial,  manufac- 
turing and  in  a  less  degree,  agricultural  conditions,  and  the 
corresponding  difficulty  of  adjusting  legislation,  even  on  a 
given  theory,  to  the  facts  with  which  it  seeks  to  deal.  Such  an 
accumulation  of  pertinent,  helpful  and  currently  supplemented 
information  cannot  be  obtained  under  the  old-fashioned  tariff- 
hearing  methods,  as  part  of  which  the  testimony  chiefly  of 
interested  witnesses  was  hurriedly  taken.  Indeed,  as  already 
intimated,  much  of  the  demand  for  the  Tariff  Commission  in 
this  country  has  come  from  members  of  congressional  commit- 
tees who  have  frankly  expressed  their  dissatisfaction  with  the 
insufficient  results  frequently  thus  secured.  The  situation 
requires  the  best  abilities  of  a  trained  staff  of  government 
experts,  qualified  to  handle  with  technical  skill  the  separate 
departments  of  industry  which  are  brought  together  in  the 
various  schedules  of  our  general  tariff  laws.  The  present  Com- 
mission has  always  had  in  view  the  necessity  of  securing  and 
maintaining  such  a  skilled  staff  of  advisers  and  investigators. 
For  example,  the  important  and  increasing  usefulness  of  such 
experts  must  be  evident  at  once  to  all  with  respect  to  customs 
law  problems,  cost  accounting  and  innumerable  articles  em- 
braced in  the  chemical,  metal  and  textile  schedules.  The  Com- 
mission, in  thus  using  its  expert  staff,  has  naturally  tended 
toward  standardization  in  the  collection  of  tariff  information. 
Much  material  of  a  sort  never  heretofore  assembled  for  tariff 
purposes  has  already  been  accumulated,  and  the  work  is 
steadily  and  systematically  progressing. 

Tariff  Policies  and  Public  Opinion 

Enough  has  been  said  to  make  clear  both  the  breadth  and 
limitations  of  the  Commission's  present  authority.  The  reten- 
tion by  Congress  of  rate-making  tariff  powers  is  disappointing 
to  those  persons  who  had  hoped  through  an  administrative 
rate-making  tariff  body,  for  the  complete  elimination  of  the 
tariff  from  the  field  of  public  discussion.  Many  such  sanguine 
anticipations  have  not  taken  into  account  the  constitutional 


WORK  OP  THE  TARIFF  COMMISSION  737 

control  exercised  by  Congress  over  the  levying  of  taxes.  Nor 
have  such  hopes  yet  solved  the  problem  of  defining  standards 
of  economic  policy  in  terms  sufficiently  acceptable  to  changing 
electoral  majorities,  to  permit  of  continuous  and  satisfactory 
administrative  application.  While  these  factors  remain,  the 
tariff  will  continue  in  politics,  subject  to  public  opinion  ex- 
pressed through  Congress  and  the  chief  executive.  However, 
the  Tariff  Commission,  even  with  its  limited  powers,  is  one  of 
many  indications  that  the  solution  of  tariff  problems  in  this 
country  will  hereafter  be  approached  somewhat  differently 
than  heretofore.  It  appears  reasonable  to  expect  an  increasing 
emphasis  on  the  national  aspects  of  revenue  legislation ;  fewer 
sectional  appeals;  less  log-rolling;  also  greater  stability  both  in 
domestic  and  foreign  policies,  because  of  fuller,  or,  at  any  rate, 
more  authoritative,  information  openly  available  alike  for  Con- 
gress and  the  public.  The  immediate  responsibility  of  the 
Tariff  Commission  is  to  serve  our  lawmakers  by  reporting, 
thoroughly  and  without  bias,  the  material  facts  about  industry. 
It  remains  for  public  opinion  through  its  legislative  and  execu- 
tive representatives  to  use  its  sovereign  force  to  direct  the 
development  of  commercial  and  industrial  policies  along  the 
broad,  consistent  and  sound  lines  dictated  by  the  general 
welfare. 

These  various  aspects  of  our  work  have  been  reviewed  in 
order  that  you  may  have  in  mind  those  particulars  on  which 
you  are  likely,  from  time  to  time,  to  consult  with  or  be  consulted 
by  the  Tariff  Commission,  and  on  which  you  may  assist  the 
Commission  in  presenting  facts  of  a  pertinent  nature  to  the 
legislative  and  executive  departments  of  the  Government.  In 
the  performance  of  its  duties  the  Commission  requests  the 
cordial  co-operation  of  the  membership  of  the  American  Mining 
Congress.  [Applause.] 


738         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  AMERICAN  QUICKSILVER  PROBLEM 

Address  by  Fletcher  Hamilton,  State  Mineralogist  of  California,  Before 
the  American  Mining  Congress 

The  American  quicksilver  industry  today  faces  the  situation 
of  fighting  for  its  existence  with  all  the  cards  stacked  against 
it  and  the  only  possible  solution  of  its  problem  depends  upon 
whether  or  not  the  policy  of  our  government  is  going  to  be  one 
of  protection  for  the  industry. 

The  final  analysis  of  the  competitive  conditions  which  con- 
front it  may  be  judged  from  the  following: 

First — That  the  ore  deposits  of  foreign  countries  are  invari- 
ably of  higher  tenor  or  metal  content  than  those  of  the  United 
States.  Spanish  ore  averages  11  per  cent.,  Italian  ore  8  per 
cent,  and  Austrian  ore  1  per  cent.,  while  the  average  content 
of  ore  mined  in  the  United  States  is  one-half  of  1  per  cent. 

Second — The  cost  of  labor  in  foreign  countries  is  invariably 
much  lower  than  in  the  United  States;  in  fact,  the  Spanish 
mines  are  operated  with  convict  labor. 

It  will  therefore  be  readily  seen  then  that  the  cost  of  pro- 
duction of  a  flask  of  quicksilver  under  the  conditions  noted 
above  will  be  greatly  below  that  possible  in  the  United  States. 

The  only  condition  then  left  to  consider  is  the  ore  supply  of 
this  foreign  competitor.  Suffice  it  to  say  that  the  Almaden 
mine  of  Spain  alone,  with  its  11  per  cent,  ore,  operated  by  con- 
vict labor  and  its  output  contracted  to  the  Rothschilds,  of 
London,  at  £7,  or  $34,  per  flask  has  sufficient  tonnage  to  supply 
the  world  for  many  decades  to  come. 

As  a  means  of  giving  some  gauge  of  the  differences  in  cost 
of  production  I  have  consulted  the  record  of  the  United  States 
Tariff  Commission  wherein  they  determined  that  the  cost  of 
producing  quicksilver  in  the  United  States  averages  between 
$70  and  $75  per  flask. 

The  best  information  upon  Almaden,  Spain,  costs  is  that 
they  increased  from  $8.29  per  flask  in  1900  to  $15.22  per  flask 
in  1915.  The  costs  since  the  war  of  all  foreign  production  are 
not  as  yet  available,  but  I  understand  will  be  very  shortly. 


THE  AMERICAN  QUICKSILVER  PROBLEM  739 

One  might  naturally  ask  why  it  is  that  the  industry  has  sur- 
vived to  this  time  and  my  only  answer  is  that  it  has  existed 
through  sufferance  and  for  some  reason  the  Rothschilds  have 
been  satisfied  with  their  apparent  power  to  control  price  rather 
than  throttle  the  United  States  production. 

I  shall  not  at  this  time  go  into  the  statistics  of  import  and 
export  and  try  to  interpret  their  influence  on  price  control, 
except  to  give  an  example  which  happened  in  1917  when  the 
demand  for  quicksilver  was  so  great  and  speculation  rife. 

At  the  peak  of  high  prices  England  shipped  in  3,000  flasks 
and  broke  the  market  and  gradually  bought  it  back  at  a  price 
more  nearly  the  average  for  the  year. 


Vitally  Necessary  Chemical 

As  you  all  know,  quicksilver  is  used  in  the  manufacture  of 
drugs  and  chemicals,  fulminate,  vermilion,  anti-fouling  paint, 
electrical  apparatus,  felt  manufacture,  in  gold  and  silver  amal- 
gamating mills  and  various  miscellaneous  uses  and  it  has  not 
been  supplanted  to  any  considerable  extent  by  substitutes.  It 
is  a  metal  which  is  vital  to  the  industries  of  the  nation  in  that 
it  has  no  substitute ;  its  use  in  war  munitions  is  a  paramount 
need.  I  cannot  agree  with  the  opinion  that  our  quicksilver 
resources  should  be  conserved  for  future  needs  by  allowing  our 
mines  to  shut  down  and  our  plants  to  decay.  The  only  sane 
conservation  is  that  which  allows  industry  to  proceed  without 
waste,  to  encourage  the  development  of  reserve  ores  and  make 
possible  the  search  for  ore  bodies  which  today  are  unknown. 
It  does  not  lie  within  the  knowledge  of  today  what  will  be 
discovered  tomorrow  unless  no  work  is  done  today,  and  then 
we  may  be  sure  that  nothing  will  be  discovered  tomorrow. 

It  is  vital  to  the  nation  that  we  should  maintain  our  quick- 
silver industry  in  operating  condition.  To  do  this  it  must  be 
given  protection. 

California  Production 

For  the  past  68  years  the  industry  in  California  has  recorded 
a  production  every  year  of  not  less  than  10,000  flasks  minimum 
and  in  1877  a  maximum  of  79,396  flasks.  The  total  production 
during  that  time  was  2,160,349  flasks,  valued  at  $104,572.032, 


740         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

During  two  or  three  years  previous  to  the  war  our  home 
consumption  of  quicksilver  was  approximately  25,000  flasks 
annually  and  our  domestic  production  below  20,000  flasks. 

During  the  war  an  increased  demand  stimulated  production 
to:  29,932  flasks  in  1916;  36,159  flasks  in  1917;  32,883  flasks 
in  1918. 

This  undoubtedly  could  have  been  increased  were  the  miners, 
who  are  cognizant  of  the  precarious  position  of  quicksilver, 
protected. 

Forced  to  Close  Down 

There  are  of  record  several  hundred  quicksilver  mines  and 
prospects  in  California.  Today  there  are  operating  in  Cali- 
fornia about  ten  mines,  producing  at  the  rate  of  about  1,200  to 
1,600  flasks  a  month.  The  present  price  and  cost  of  production 
are  about  a  stand-off  and  the  industry  is  marking  time.  With 
insurance  against  loss  through  a  control  by  protection  it  is  my 
belief  that  the  quicksilver  resources  of  the  United  States  could 
supply  its  needs.  At  present  the  only  other  States  producing 
are  Nevada  and  Texas.  Their  production  is  about  half  of 
normal. 

With  the  quicksilver  producers  of  the  United  States  out  of 
the  market,  the  consumers  of  this  commodity  in  the  United 
States  will  undoubtedly  pay  a  handsome  price  for  the  privilege 
of  using  an  imported  article. 

As  I  have  stated,  the  solution  of  their  problem  lies  in  the 
policy  to  be  adopted  by  the  Government.  Protection  by  a 
sufficient  tariff  means  salvation  to  a  lost  soul ;  inaction  means 
deserted  and  abandoned  communities.  I  sincerely  hope  that 
faith  will  be  kept  with  the  industry. 


THE  AMERICAN  TUNGSTEN  SITUATION  741 


THE  AMERICAN  TUNGSTEN  SITUATION 

i 

Address  by  HON.  E.  C.  VOORHEIS,  of  San  Francisco,  before  the  War 
Minerals  Conference,  The  American  Mining  Congress 

The  crude  tungsten  ores  of  commerce  contain  a  large  amount 
of  foreign  material,  and  as  mined  (with  the  exception  of  the 
rich  surface  float  ores)  are  usually  low  grade,  averaging  a 
small  percentage  of  tungstic  trioxide  (WOs) .  These  ores  have 
to  be  concentrated  by  machinery  to  a  high-grade  product,  aver- 
aging from  50  per  cent,  to  65  per  cent,  tungstic  trioxide,  one 
part  tungsten  (W)  to  three  parts  oxygen  (Os).  The  standard 
concentrate  of  commerce  contains  60  per  cent.  WOs.  A  unit  is 
1  per  cent,  of  a  short  ton  of  2,000  pounds,  namely  20  pounds, 
of  tungstic  trioxide. 

Uses  of  Tungsten  and  Its  Products 

This  high-grade  concentrate  is  used  in  the  manufacture  of 
ferro-tungsten  and  other  tungsten  products,  which  in  turn  are 
used  in  high-speed  tool  steel-making.  The  commercial  tungsten 
products  manufactured  from  tungsten  concentrate  consist  of 
ferro-tungsten,  tungsten  powder,  tungstic  acid,  calcium  tung- 
state  and  sodium  tungstate.  These  products  are  manufactured 
by  metallurgical  and  chemical  plants  especially  equipped  with 
electric  furnaces  and  scientific  apparatus  designed  for  the 
purpose. 

By  far  the  greatest  use  of  manufactured  tungsten  (ferro- 
tungsten  and  tungsten  powder)  is  in  the  making  of  high-speed 
tool  steel.  From  13  per  cent,  to  20  per  cent,  of  tungsten  is  used 
in  high-speed  steel.  From  90  per  cent,  to  95  per  cent,  of  the 
tungsten  consumed  is  used  for  this  purpose.  Additions  of  tung- 
sten impart  to  the  steel  the  property  of  retaining  its  temper  at 
very  high  rates  of  speed  and  at  extremely  high  temperatures, 
while  tools  made  from  simple  carbon  steels  will  not  stand  up 
under  these  severe  conditions.  This  property  is  especially 
valuable  in  so-called  high-speed  cutting  lathe  tools,  permitting 
the  tools  to  operate  at  five  or  six  times  the  cutting  speed  fo,r- 
merly  attained  when  carbon  steel  tools  were  used,  and  at  the 


742         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

same  time  permitting  a  much  heavier,  deeper  cut  to  be  made  in 
the  steel  object  or  machined  part  on  which  the  tool  is  working. 
In  a  day  and  age  demanding  speed,  accuracy,  production, 
efficiency  and  economy  of  time  and  labor,  the  use  of  tungsten 
in  the  making  of  high-speed  tools  is  imperative. 

Ferro-tungsten  and  tungsten  powder  are  also  used  in  the 
manufacture  of  special  alloy  steels,  such  as  permanent  magnet 
steel  (containing  5  per  cent,  tungsten),  and  valve  steel  for 
automobile  and  aeroplane  engines.  Its  use  in  high-speed  tools 
enabled  the  speeding  up  of  the  shipbuilding  and  munition- 
making  program  and  earned  for  it  its  title  of  the  "Key  War 
Mineral."  Its  use  in  the  manufacture  of  electric  lamp  filaments 
and  wireless  telephone  amplifiers  is  well  known. 

Tungstic  acid,  calcium  tungsten  and  sodium  tungstate  are 
chiefly  used  in  the  dye  and  chemical  industries. 


Sources 

The  chief  sources  of  tungsten  in  the  world  are  Southern 
China,  Burma,  the  United  States  and  South  America.  The 
importance  of  these  respective  tungsten  sources  is  in  the  order 
named.  Deposits  of  minor  importance  occur  in  other  countries. 


Domestic  Production 

Tungsten  ore  was  first  discovered  in  quantity  in  the  United 
States  in  the  year  1900.  The  discovery  was  made  in  Boulder 
County,  Colorado.  During  the  fourteen  years  prior  to  1914 
this  district  produced  fully  60  per  cent,  of  the  total  tungsten 
mined  in  the  United  States.  Since  1914  the  production  of  Cali- 
fornia has  about  balanced  that  of  Colorado.  Tungsten  has  been 
found  in  some  thirteen  States  of  the  Union  and  in  Alaska.* 
The  chief  production  outside  of  Colorado  and  California  has 
been  obtained  in  Nevada  and  Arizona.  Discoveries  made  in 
Nevada  during  the  latter  part  of  1918  bid  fair  to  eclipse  in 
extent  the  famous  deposits  of  Colorado  and  California. 


*  Colorado,  California,  Nevada,  Arizona,  South  Dakota,  Missouri,  Alaska,  Utah,  New 
Mexico,  Idaho,  Connecticut,  Washington,  Montana,  Virginia.  See  the  "Mineral  Industry 
During  1917,"  by  G.  A.  Rousch,  a  reliable  authority. 


THE  AMERICAN  TUNGSTEN  SITUATION  743 

Foreign  Production 

Outside  of  the  United  States  the  largest  production  in  the 
world  is  obtained  in  Southern  China  and  Burma.  These  dis- 
tricts in  1918  produced  more  than  50  per  cent,  of  the  total 
world  output.  A  large  part  of  the  Asiatic  tungsten  comes  from 
new  fields  of  high-grade  float  ore  that  can  be  gathered  off  the 
ground  by  coolie  labor.  In  South  America  tungsten  mining 
has  been  carried  on  for  a  number  of  years  and  some  deep 
mining  has  been  done.  Portugal  produces  at  least  half  of  the 
tungsten  ore  mined  in  Europe.  The  Portuguese  deposits  are 
largely  controlled  by  British  capital. 


History 

As  above  stated,  tungsten  ore  was  first  discovered  in  quan- 
tity in  the  United  States  in  the  year  1900.  From  46  tons  in 
that  year  the  annual  production  rose  to  1,500  tons  at  the  begin- 
ning of  1914.  Under  the  stimulus  of  higher  prices  and  the 
demand  of  world-war  necessities,  we  produced  from  5,000  to 
6,000  tons  of  60  per  cent,  concentrate  in  each  of  the  years  1916, 
1917  and  1918.  Old  camps  revived,  and  as  the  result  of  dis- 
covery after  discovery  and  development  after  development,  new 
and  thriving  towns  grew  up  in  Colorado,  California,  Nevada, 
Arizona  and  many  other  places,  giving  investment  to  many 
millions  of  capital  and  employment  to  thousands  of  people, 
building  up  new  communities  of  happy  and  prosperous  homes. 

At  the  present  time  all  of  the  tungsten  mines  and  concen- 
trating plants  throughout  the  country  are  closed  down.  The 
question  presented  is  whether  the  domestic  tungsten  mining 
industry  shall  be  preserved  as  one  of  the  units  of  the  industrial 
independence  of  America,  or  whether  it  is  going  to  be  allowed 
to  perish  and  disappear  from  the  United  States.  Unless  Con- 
gress intervenes  the  domestic  production  will  be  completely 
wiped  out  by  the  competition  arising  out  of  the  condition  of  the 
ore  deposits  and  the  submerged  labor  of  Southern  China,  Burma 
and  Bolivia.  H.  R.  4437,  introduced  by  Congressman  Timber- 
lake,  of  Colorado,  June  2,  1919,  is  designed  to  remedy  this  situ- 
ation. This  bill  levies  a  tariff  of  $10  per  unit  of  20  pounds 
tungstic  trioxide  on  all  importations  of  tungsten  ore,  and  while 
allowing  the  present  tariff  on  the  finished  product  to  continue, 


744         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

adds  a  compensatory  differential  upon  that  product  to  equalize 
any  increased  cost  caused  by  the  tariff  placed  on  the  crude  ore. 


Germany  the  Former  World  Market 

It  is  a  striking  fact  in  the  history  of  tungsten  that  by  far  the 
greatest  part  of  the  world's  tungsten  ore  was  imported  into 
Germany  prior  to  the  world  war.  Part  of  this  tonnage  was 
then  re-exported  as  concentrate.  The  nations  of  the  world  were 
more  or  less  taken  by  surprise  when  with  the  advent  of  the 
war  they  suddenly  realized  that  Germany  had  completely  con- 
trolled this  vital  essential  of  the  war.  Even  the  extensive  Brit- 
ish-controlled deposits  of  Burma  had  been  contributing  to  Ger- 
many's stores  of  tungsten.  With  the  realization  of  the  great 
sudden  need  for  tungsten  Great  Britain  placed  an  embargo  on 
all  shipments  from  British  colonies  and  possessions,  including 
Burma,  except  to  herself.  The  high-speed  tool  steel  manufac- 
turers of  the  United  States  were  suddenly  confronted  with  a 
serious  shortage  of  tungsten,  because  of  the  fact  that  our  own 
mines  had  not  been  developed  sufficiently  to  begin  to  supply  the 
increased  domestic  requirements,  and  practically  no  concerns 
existed  in  the  country  to  refine  whatever  domestic  ore  that  was 
produced.  By  far  the  greatest  part  of  the  tungsten  ore  im- 
ported into  Germany  was  manufactured  into  finished  ferro- 
tungsten  and  tungsten  powder,  and  then  distributed  to  the 
nations  of  the  world.  Germany  apparently  was  the  only  nation 
in  the  world  that  seemed  to  realize  fully  the  importance  of 
tungsten  during  this  period,  for,  although  the  United  States 
was  always  one  of  the  greatest  users  of  the  tungsten-finished 
product,  and  was  sometimes  the  largest,  and  always  a  compara- 
tively large,  producer  of  tungsten  ore,  the  trading  center  of  the 
tungsten  industry  was  in  Germany,  and  Germany's  exports  of 
ferro-tungsten  and  tungsten  powder  went  largely  to  England 
and  the  United  States.  With  the  advent  of  the  world  war,  how- 
ever, the  same  imperative  demand  which  had  built  up  the  tung- 
sten ore-mining  towns  and  concentrating  mills,  and  which  set 
in  motion  the  necessary  machinery  for  perfecting  the  dye  and 
chemical  industry  in  the  United  States,  accomplished  magical 
development  of  the  ferro-alloy  and  tungsten  metallurgical  in- 
dustry, giving  to  the  American  tungsten  miner  a  market  for 


THE  AMERICAN  TUNGSTEN  SITUATION  745 

his  product  in  this  country  instead  of  Germany,  if  he  is  given 
such  measure  of  protection  as  will  allow  his  industry  to  exist. 

Future  Domestic  Consumption  and  Production 

An  estimate  of  the  peace  needs  of  our  country  for  the  next 
few  years  has  conservatively  placed  our  requirements  at  about 
6,000  or  7,000  tons  of  60  per  cent,  concentrate  per  year.  With 
the  placing  upon  tungsten  ores  of  a  tariff  sufficient  to  assure 
the  American  tungsten  miner  reasonable  protection  against 
unfair  competition  the  experience  of  the  last  three  years  has 
amply  demonstrated  the  capacity  of  our  domestic  production  to 
furnish  a  very  large  part — from  3,500  to  4,500  tons — of  the 
tonnage  required  for  domestic  consumption. 

Comparative  Costs  of  Production 

A  careful  analysis  of  mining  conditions  in  the  Orient  fur- 
nishes ample  evidence  that  60  per  cent,  ores  may  readily  be 
delivered  at  our  Eastern  seaboard  from  Southern  China  at  $6 
or  $7  per  unit  and  still  afford  the  Asiatic  miner  a  fair  profit, 
while  twice  that  amount  would  not  equal  even  the  average  cost 
of  American  production. 

The  labor  employed  in  mining  Asiatic  tungsten  ore  is  coolie 
labor,  which  is  reported  as  being  paid  approximately  40  cents 
per  day  for  men  and  20  cents  per  day  for  women  and  children. 
Most  of  the  deposits  of  South  America  are  mined  by  native 
Indian  laborers,  who  are  paid  somewhat  better  than  the  coolie 
labor  of  China.  In  Portugal  women  and  boys  are  used  in  the 
sorting  of  ore  at  a  daily  wage  of  from  16  cents  to  20  cents. 
Mine  labor,  recruited  from  the  peasant  classes,  is  paid  from  50 
to  60  cents  per  day. 

The  difference  is  not  due  solely  to  the  labor  cost,  moreover, 
but  is  due  as  well  to  the  fact  that  the  surface  deposits  can  be 
gathered  up  very  cheaply  and  these  deposits  are  almost  always 
quite  large  and  very  high  grade.  In  the  average  float  field  it  is 
not  unusual  to  be  able  to  gather  up  high-grade  ore  which 
will  analyze  60  to  65  per  cent,  tungstic  trioxide.  It  has  been 
stated  that  as  our  mining  operations  extend  downward  into  the 
ground  and  we  get  beyond  the  zone  of  surface  enrichment,  on 
the  average  we  have  to  mine  low-grade  ores  analyzing  as  low 


746         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

as  one-half  of  1  per  cent,  tungstic  trioxide,  and  these  ores  then 
have  to  be  concentrated  by  the  miner  to  a  high-grade  product, 
analyzing  about  60  per  cent,  tungstic  trioxide.  To  illustrate 
the  point,  it  would  take  80  tons  of  1  per  cent,  ore  to  concentrate 
into  1  ton  of  60  per  cent,  ore,  after  making  due  allowance  for 
the  loss  occurring  in  the  process  of  concentration.  The  neces- 
sity of  making  this  concentration  compels  the  installation, 
equipment,  management  and  maintenance  of  large  costly  mills 
and  concentration  plants,  as  an  entire  new  element  of  cost  in 
addition  to  the  cost  of  development  and  extraction  of  the  ore. 
Because  of  these  facts  the  protection  asked  for  is  not  due  solely 
to  the  difference  in  labor  cost  between  the  .countries.  In  addi- 
tion thereto  must  be  added  the  additional  cost  necessary  to  safe- 
guard life  and  limb  under  our  salutary  industrial  mining  laws, 
which  are  in  conformity  with  the  American  standard.  No 
tariff,  therefore,  would  be  fair  to  the  producer  which  would  be 
predicated  upon  any  one  of  the  factors  alone  instead  of  taking 
them  all  into  consideration. 

Against  such  conditions  as  these  competition  under  the 
standards  of  American  labor  is  manifestly  impossible.  The 
American  mining  industry,  together  with  the  very  large  invest- 
ments tied  up  in  it,  faces  destruction,  unless  such  a  measure  of 
protection  shall  be  accorded  as  will  give  the  American  tungsten 
miner  at  least  an  even  break  in  the  competition  for  the  Ameri- 
can market. 


Arguments  in  Favor  of  Protection 

No  fair  argument  can  be  adduced  in  favor  of  the  importation 
of  foreign  tungsten  ores  to  the  complete  exclusion  of  the 
domestic  product,  and  there  are  many  reasons  why  a  fair 
measure  of  protection  should  be  extended  to  the  production  of 
the  domestic  material,  to  safeguard  the  existence  and  perma- 
nence of  the  industry,  some  of  which  may  be  briefly  stated  as 
follows : 

1.  In  the  first  place,  we  are  not  embarrassed  by  any  consideration  of 
the  necessity  of  furnishing  tonnage  for  ships  bringing  the  product  from 
foreign  countries,  because  the  volume  of  tonnage  of  this  particular  mate- 
rial is  so  small  as  to  be  for  such  purpose  practically  negligible. 

2.  Any  export  trade  to  foreign  countries  desiring  the  manufactured 
finished  product  of  ferro-tungsten  or  tungsten  powder  for  export  from 


THE  AMERICAN  TUNGSTEN  SITUATION  747 

the  United  States  would  not  be  necessarily  in  any  way  affected  by  the 
duty  levied  on  the  ore  under  the  provisions  of  this  bill,  for  no  American 
ore  is  available  therefor  under  present  conditions,  and  the  manufacture 
of  such  products  from  the  ore  of  China  or  South  America  for  such  pur- 
poses could  be  carried  on  and  conducted  in  bond,  just  as  is  now  done  in 
the  case  of  the  smelting-in-bond  business  of  zinc  and  lead  foreign  ores. 

3.  It  is  better  to  afford  such  protection  to  the  home  industry  as  will 
make  permanent  the  communities  that  have  been  built  up  and  developed 
in  connection  with  and  because  of  them,  thereby  giving  employment  to 
thousands  of  our  home  people,  and  at  the  same  time  give  to  the  finished 
product  and  steel  concerns  a  supply  of  stabilized  character  upon  which 
they  can  depend,  instead  of  having  to  rely  upon  the  uncertainties  and 
fluctuations  in  price  incident  to  the  importation  of  foreign  products. 

4.  The  wide  ranges  of  the  price  of  tungsten  during  the  past  18  or  20 
years  would  serve  to  demonstrate  that  an  ad  valorem  tariff  will  not 
help  our  tungsten  mining  industry  or  the  stabilization  of  tungsten-ore 
prices.     The  greatest  sources  of  such  ore  today  outside  of  the  United 
States  are  in  countries  which  are  not  consumers.     On  an  ad  valorem 
basis  our  mine  operations  would  fluctuate  with  the  changes  in  the  selling 
price  of  foreign  ores  at  the  point  of  export,  and  if  the  selling  price  of 
Asiatic  ores  should  become  low  our  mining  industry,:  if  operating  under 
an  ad  valorem  duty,  would  again  have  to  be  closed  down.     On  the  other 
hand,  a  tariff  based  on  so  much  per  unit  tends  to  stabilize  the  value  of 
ore  mined  regardless  of  price  fluctuations  in  foreign  countries,  and  this 
serves  at  least  to  guarantee  to  the  miner  that  the  market  will  not  be  cut 
out  from  underneath  him  completely. 

5.  Under  the  provisions  of  this  bill,  while  sufficient  protection  is  given 
to  the  miners  of  tungsten  ore,  the  provisions  of  paragraph  "Second"  of 
the  first  section  are  intended  to  protect  by  a  compensatory  differential 
the  interests  of  the  finished  product  and  high-speed  tool  steel  men,  with- 
out unduly  raising  the  price  of  the  product.    As  a  matter  of  fact,  if  our 
tungsten  mines  are  going  to  remain  shut  down,  by  the  failure  to  pass 
such  legislation  as  will  revive  and  adequately  aid  them  to  continue  in 
operation,  the  Chinese  ore  producer  will  raise  the  selling  price  of  his  ore 
to  a  figure  just  below  what  would  sustain  American  production,  and  Con- 
gressional  inaction   would  then   have  succeeded   in  killing  our  mining 
industry  without  having  conferred  any  real  benefit  on  the  consumer. 

6.  From  the  standpoint  of  conservation,  particularly  in  reference  to 
preparedness,  as  was  pointed  out  by  Mr.  J.  H.  Holmes,  Jr.,  in  the  hearing 
before  the  Committee  on  Ways  and  Means,  a  duty  of  $10  per  unit  will 
enable  tungsten  mine  operators  of  our  country  to  develop  the  tungsten 
resources,  so  that  in  case  of  a  national  emergency  we  could  produce 
quickly  tungsten  ore  at  a  rate  sufficient  to  meet  the  requirements  of  the 
nation  in  any  critical  period.    It  must  be  remembered  that  true  conserva- 
tion is  not  promoted  by  timidly  sitting  beside  some  isolated  mine,  already 
discovered  and  only  partly  developed,  and  refusing  to  open  it  up  further. 
Only  energetic  and  persistent  mining  has  been  responsible  for  the  develop- 
ment of  the  present-known  ore  reserves  of  the  country. 


748         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Known  Deposits  Increased 

The  known  ore  deposits  at  the  beginning  of  1918  were  greatly  increased 
during  the  year  through  new  discoveries,  particularly  in  Nevada.  There 
is  no  reason  why  a  permanent  mining  industry  should  not  develop  just 
as  has  been  the  case  with  gold,  silver,  copper  and  other  minerals  in  our 
Western  States.  New  discoveries  are  constantly  being  made  in  States 
which  heretofore  were  not  supposed  to  contain  tungsten  in  sufficient 
quantities  to  be  of  importance.  To  illustrate  the  growth  of  new  fields, 
in  19X7  it  began  to  be  rumored  that  Nevada  had  tungsten  mineral  wealth 
of  great  importance,  and  Nevada  actually  produced  during  that  year  250 
tons  or  the  equivalent  of  60  per  cent,  tungsten  ore.  In  1918  Nevada  pro- 
duced 885  tons,  and  producers  of  that  State  now  claim  that  they  can 
equal  the  production  of  either  Colorado  or  California  out  of  entirely  new 
properties  discovered  through  the  intensive  prospecting  and  develop- 
ment that  arose  under  war  necessity. 

We  must  remember  that  tungsten  mining  is  a  comparatively  new 
industry,  and  that  until  the  war  there  was  no  great  incentive  to  discover 
the  deposits  of  it  which  exist  in  the  United  States.  The  history  of 
tungsten  mining  in  this  country  presents  thus  far  a  remarkable  parallel 
to  the  history  of  gold  mining.  When  the  abnormally  rich  gold  diggings 
of  the  days  of  '49  were  first  discovered  and  mined  there  were  timid 
prophets  who  feared  that  with  the  passing  of  these  surface  deposits  the 
country  would  exhaust  its  resources  of  gold.  The  prospector  and  the 
miner,  however,  proved  that  the  real  permanent  gold  resources  of  this 
country  existed  in  lodes  and  veins  in  the  ground,  and  that  the  surface 
deposits  of  all  kinds  had  been  merely  erosions  and  deposits  from  these 
veins.  It  was  only  by  his  incessant  digging,  prospecting,  development 
and  mining  of  these  veins  that  the  real  permanent  gold  industry  of  the 
country  that  has  been  part  of  its  history  for  the  last  70  years  was 
finally  brought  about.  The  miner  knows  that  surface  float  ores  are 
really  indications  of  the  presence  of  these  ores  somewhere  in  the  neigh- 
borhood in  the  more  permanent  form  of  lodes  and  veins.  The  prospect- 
ing and  mining  of  tungsten  made  possible  by  the  experience  of  the  last 
four  years,  instead  of  causing  any  legitimate  fear  of  how  long  our  reserves 
will  last,  has  resulted  in  the  discovery  of  many  entirely  new  fields  and 
has  demonstrated  that  the  permanency  of  tungsten  mining  as  an  industry 
depends  upon  the  continued  development  and  mining  of  its  deeper  mines, 
lodes  and  deposits. 

7.  As  to  American  capital  invested  in  tungsten  mines  in  this  country, 
this  committee  knows  that  the  companies  or  individuals  owning  such 
mines  have  to  bear  their  full  share  of  all  taxation.  Profits  made  by 
American  capital  invested  in  foreign  countries,  on  the  other  hand,  how- 
ever large,  will  never  pay  any  part  of  the  normal,  excess  profits  or 
war  tax,  as  applied  to  corporations  under  existing  laws,  and  it  is  doubtful 
whether  the  Government  would  even  be  able  to  collect  an  income  tax. 
But  any  American  having  capital  invested  in  a  foreign  country  that 
would  oppose  the  present  bill  would,  I  think,  be  a  poor  sort  of  American, 


THE  AMERICAN  TUNGSTEN  SITUATION  749 

because  without  a  duty  upon  tungsten  ore  he  is  in  a  position  of  getting 
his  foreign  ores  into  the  country  without  paying  to  the  Government  a 
dollar  of  revenue  upon  its  importation.  In  opposing  this  bill  he  would 
be  advocating  the  continuance  of  a  condition  under  which  the  investment 
of  American  capital  in  this  country  would  be  made  valueless,  American 
homes  and  communities  would  be  wiped  off  the  map,  and  American  work- 
ingmen  driven  to  find  employment  elsewhere  in  order  that  he  might  get 
his  foreign  ore  into  the  country  without  paying  any  revenue  on  it  to  his 
Government. 

8.  This  bill,  moreover,  is,  in  a  degree,  a  revenue  measure,  for  the  rea- 
son that  $10  per  unit  only  covers  a  difference  in  cost  of  production  of  the 
average  tungsten  mines  of  the  United  States  as  against  that  of  the  low 
cost  of  production  in  foreign  fields.    The  duty  of  $10  per  unit  is  not  pro- 
hibitive, and  is  not  intended  to  be  prohibitive,  but,  on  the  contrary,  would 
give  a  maximum  of  revenue  to  the  Government  from  this  mining  industry. 
Competition  from  foreign  ores  would  still  continue  under  conditions  that 
would  nevertheless   allow   domestic   production,  and  the  best  estimates 
are  that  under  a  duty  of  $10  per  unit  the  mines  of  the  United  States 
will  produce  only  60  per  cent,  of  home  consumption,  leaving  40  per  cent, 
to  be  imported,  upon  which  a  duty  of  $10  per  unit  would  be  collected, 
and  thus  produce  direct  revenue  to  the  Government,  whereas  at  present 
the  Government  is  getting  no  revenue  whatsoever  from  this  source.    Upon 
the  basis  of  an  estimated  importation  of  3,000  tons  of  foreign  tungsten 
ore  this  would  mean  a  direct  revenue  of  $1,800,000  annually,  and  upon 
the  basis  of  an  estimated  importation  of  3,500  tons  of  foreign  tungsten 
ore  this  would  mean  a  direct  revenue  of  over  $2,000,000  annually,  all 
of  which  is  now  entirely  lost  to   the   Government.     Furthermore,  the 
domestic  production  of  60  per  cent,  of  the  total  domestic  consumption  of 
tungsten  ore  would  furnish  its  quota  of  direct  revenue  to  the  Govern- 
ment upon  normal,  excess,  and  war-profit  taxes,  as  well  as  upon  the 
income  tax  of  stockholders  as  individuals.     Even  if  any  mine  can  pro- 
duce tungsten  ore  at  considerably  less  than  the  average  cost  of  produc- 
ing tungsten  ore,  the  Government  would  still  receive  a  very  large  per- 
centage of  any  such  profits,  under  the  present  revenue  laws,  whereas 
at  present,  with  our  domestic  mines  closed  down,  there  is  no  revenue  to 
the  Government  from  production  from  any  of  them. 

9.  This  bill  might  well  be  termed  an   emergency  measure.     Surely, 
whether  this  is  a  measure  of  protection  with  substantial  incidental  reve- 
nue, or  a  substantial  revenue  bill  with  incidental  protection,  is  beside 
the  point,  because  it  may  be  based  upon  a  higher  consideration  of  public 
policy — namely,  that  the  protection  afforded  by  its  provisions  will  go  far 
to   insure   the    rehabilitation    and    permanency,   and    the    possibility   of 
mobilization  in  war  and  peace,  of  an  industry  that  will  contribute  in  no 
small  degree  toward  the  industrial  independence  of  America.     Just  as 
Germany,  prior  to  the  war,  exercised  and  maintained  a  complete  monopoly 
of  the  dye  and  chemical  industries,  it  is  equally  true  that  she  controlled 
completely  this  most  essential  of  all  war  minerals — tungsten — which  was 
so  indispensable  in  speeding  up  our  ship  and  gun  program.     How  far 


750         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  increasing  importance  of  future  events  in  countries  bordering  on  the 
shores  of  the  Pacific  may  become  it  is  not  vouchsafed  us  to  know.  Plainly, 
the  part  of  our  tariff  system  which  affects  this  mineral  and  its  products 
is  one  which  needs  prompt  attention.  In  this  connection,  the  following 
sentence  from  the  President's  message  calling  this  special  session  of 
Congress  is  worthy  of  consideration: 

"The  experiences  of  the  war  have  made  it  plain  that  in  some 
cases  too  great  reliance  on  foreign  supply  is  dangerous,  and  that 
in  determining  certain  parts  of  our  tariff  policy  domestic  con- 
siderations must  be  borne  in  mind  which  are  political  as  well 
as  economical." 


AMERICAN  CITIZENSHIP  751 


AMERICAN  CITIZENSHIP 

Stirring  Address  Before  The  American  Mining  Congress  by 
GOV.  A.  H.  ROBERTS,  of  Tennessee 

I  esteem  it  a  peculiar  pleasure,  as  well  as  a  very  high  honor, 
to  have  an  opportunity  this  afternoon  to  speak  a  word  to  this 
great  body  of  representative  citizens  of  America,  upon  the  one 
issue  now  confronting  the  people.  I  may  say,  at  the  outset, 
that  there  is  but  one  issue  in  America  today,  and  that  issue  is 
whether  or  not  a  Government  of  the  people,  by  the  people  and 
for  the  people  shall  perish  from  the  earth.  [Applause.] 

Those  of  us  who  were  intimately  and  directly  connected  with 
the  world  war,  by  having  a  son  or  other  relative  engaged  in 
that  great  struggle,  and  especially  those  of  our  people  who  had 
the  honor  of  going  abroad  to  fight  for  freedom  and  for  civiliza- 
tion, felt  that,  when  Germany  ran  up  the  white  flag  on  Novem- 
ber 11,  1918,  and  when  the  black  eagle  of  Germany  lay 
dead  in  the  pit,  all  danger  to  free  governments  had  passed 
away ;  we  thought  that,  when  the  Romanoff  and  the  Hapsburg 
and  the  Hohenzollern  had  been  driven  from  their  thrones,  and 
when  the  doctrine  that  "might  makes  right"  had  been  swept 
away  by  the  Allied  armies,  man,  perhaps  throughout  the  ages, 
would  enjoy  the  freedom  and  the  civilization  and  the  liberty 
that  had  been  won  or  saved  at  so  great  a  cost. 

That  war  was  fought  for  the  determination  of  one  specific 
principle,  whether  or  not  "might  makes  right"  in  the  world,  or, 
otherwise  stated,  whether  the  people  of  the  earth  have  a  right 
to  set  up  for  themselves  free  governments  of  their  own  choice. 
Our  great  President  stated,  when  he  stood  at  Mount  Vernon 
on  July  4,  1918,  in  defining  in  a  single  sentence  the  purpose  of 
that  great  struggle :  "What  we  seek  is  the  reign  of  law  based 
upon  the  consent  of  the  governed  and  sustained  by  the  organ- 
ized opinion  of  mankind."  That,  my  fellow-citizens,  was  the 
heartbeat  of  every  American  citizen,  of  every  man  throughout 
the  world  who  loved  liberty,  and  today  that  statement  is  as 
true  as  it  was  on  the  Fourth  of  July  last  year.  What  we  seek 
now  is  the  reign  of  law  based  upon  the  consent  of  the  governed 


752         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  sustained  by  the  organized  opinion  of  mankind.  What  we 
are  fighting  now  is  the  principle  of  a  government  of  class — a 
doctrine  of  hate,  a  government  by  the  masses,  under  a  flag  that 
flies  over  people  who  are  taught  to  love  each  other. 

Crime  Follows  War 

After  every  great  war  there  has  followed  a  crime  wave.  It 
was  so  even  in  the  Revolutionary  War.  The  first  President  of 
this  republic,  in  a  letter  written  soon  after  the  great  crime 
wave  had  begun  to  sweep  over  the  thirteen  colonies,  made  a 
statement  that  is  pertinent  now,  and  I  think  it  is  worth  repeat- 
ing, because  I  believe  that  the  one  thing  now  most  needed  is 
for  the  people  of  this  country  to  turn  back  to  the  teachings  and 
the  doctrines  and  the  principles  of  the  fathers,  to  go  back,  if 
you  please,  to  fundamentals,  and  that,  now  if  we  would  hark 
back  to  those  principles,  it  would  be  but  a  short  time  until  these 
crime  waves,  these  false  doctrines,  these  governmental  heresies, 
would  be  driven  from  America. 

The  father  of  our  country  made  use  of  this  language,  in 
speaking  particularly  of  Shay's  rebellion  in  Massachusetts: 
"What,  gracious  God,  is  man  that  there  should  be  such  incon- 
sistencies, and  perfidiousness  in  his  conduct?  It  was  but  the 
other  day  that  we  were  shedding  our  blood  to  obtain  the  Con- 
stitution under  which  we  now  live,  and  now  we  are  unsheath- 
ing our  swords  to  overturn  it.  The  thing  is  so  unaccountable 
that  I  hardly  know  how  to  realize  it  or  persuade  myself  that  I 
am  not  under  a  dream."  How  applicable  that  statement  is! 
How  unaccountable  is  this  inconsistent  thing  in  this  country 
that  all  over  our  land  there  should  be  evidences  that  a 
disease  afflicts  the  republic,  that  the  life  blood  of  a  nation  has 
been  poisoned  by  anarchy,  by  socialism,  by  Bolshevism  or 
syndicalism ! 

In  Chicago  this  disease  manifests  itself  in  the  form  of  a  race 
riot;  in  Washington,  perhaps,  in  the  same  form;  in  Omaha,  in 
Arkansas,  all  over  the  country,  we  see  these  symptoms,  clear 
and  unmistakable,  of  a  poison  that  has  been  injected  into  the 
heart  of  the  republic.  The  seed  of  this  terrible  disease  was 
brought  to  our  shores  from  foreign  lands.  We  can  very  well 
understand  how,  under  the  despotism  of  the  Old  World,  men 
who  have  been  struggling  for  generations  for  a  bare  existence 


AMERICAN  CITIZENSHIP  753 

should  be  taught  to  hate  their  over-lords.  But,  fellow-citizens, 
in  a  country  like  ours,  where  all  men  are  free,  it  is  unthinkable 
and  unaccountable  that  the  seed  should  find  lodgment  in  our 
soil,  and  that  it  should  germinate  and  grow  and  bear  the  bitter 
fruit  that  we  now  see  all  over  the  country. 

Get  Back  to  Fundamentals 

As  I  said,  it  seems  to  me  that  the  pressing  need  of  the  hour 
is  for  us,  as  Americans,  to  go  back  to  the  republic,  back  to 
fundamentals.  Le  us  inquire  into  the  nature  and  character  of 
our  Constitution,  the  greatest  document  ever  written  by  the 
hand  of  man.  It  was  said  by  William  Pitt  that  it  will  be  the 
admiration  of  all  ages  and  the  pattern  for  all  future  govern- 
ments, and  Gladstone  pronounced  it  the  greatest  product  of 
the  brain  and  purpose  of  man.  Here  we  have  this  great  docu- 
ment that  guarantees  to  every  citizen  three  separate  independ- 
ent rights.  I  sometimes  liken  our  Constitution  and  our  system 
of  government  to  a  great  structure  that  stands  upon  three 
pillars.  If  either  of  these  pillars  is  undermined,  the  structure 
must  fall  in  a  heap  of  ruins  upon  the  ground.  This  Constitu- 
tion guarantees  to  every  citizen,  in  the  first  place,  the  protec- 
tion of  his  life;  second,  it  guarantees  to  him  his  liberty,  and 
third,  it  guarantees  to  him  his  right  to  individual  ownership  of 
property. 

Let  us  look  at  these  three  principles  for  just  a  moment.  The 
most  sacred  and  priceless  gift  that  any  man  has  is  his  life. 
Our  Constitution  guarantees  that  every  citizen,  before  being 
deprived  of  his  life,  shall  be  tried  by  a  judge  and  a  jury  of 
twelve,  with  the  right  to  meet  the  witnesses  face  to  face. 
Every  element  of  the  offense  must  be  made  out  beyond  a  rea- 
sonable doubt  before  he  forfeits  his  right  to  his  life.  All  over 
this  republic  now,  not  only  in  the  South,  but  in  the  North  as 
well,  we  see  the  angry  mob  seizing  the  helpless  victim,  denying 
to  him  this  constitutional  right  and  taking  his  life  in  haste  and 
anger,  and  often  the  life  of  an  innocent  man.  This  danger,  my 
friends,  imperils  the  life  of  the  republic,  and  it  is  the  duty  of 
every  citizen  who  loves  the  flag,  who  believes  in  our  institu- 
tions, to  fight  this  mob  propaganda,  to  insist  always  that  every 
citizen,  whether  white  or  black,  shall  be  protected  in  this,  his 
most  sacred  right  [Applause.]  It  is  a  source  of  great  pride 


754         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

to  be  able  to  say  that  since  I  took  the  oath  of  office  not  a  single 
human  being  has  lost  his  life  in  Tennessee  at  the  hands  of  a 
mob.  [Applause.] 


Liberty  Assured  by  Constitution 

The  next  fundamental  principle  of  government  is  that  the 
citizen  shall  be  protected  in  his  liberty.  What  does  that  mean, 
fellow-citizens?  It  means  the  right  to  follow  any  vocation  he 
will,  tke  right  to  work  for  whomsoever  he  will  [applause]  and 
wherever  he  will.  When  our  fore-parents  transgressed  the  law 
and  were  driven  from  the  garden,  the  edict  went  forth  from 
Jehovah  that  man  should  earn  his  bread  by  the  sweat  of  his 
brow;  that  is  the  law  of  life;  every  man  is  enjoined  to  work  at 
some  honest  toil.  All  men  are  not  expected  to  follow  the  same 
vocation;  indeed,  the  parable  of  the  talents  is  applicable  to  us 
all.  Some  are  supposed  to  do  some  things,  and  others  other 
things,  but  every  man  is  required  to  use  his  talent,  and  the  law 
of  life  is  a  law  of  work;  it  is  a  law  of  honest  effort  and  honest 
toil,  and  the  great  trouble  with  the  world  today  is  that  it  is 
trying  to  repeal  that  Divine  law  and  get  away  from  work. 
[Applause.]  "Six  days  shalt  thou  labor"  is  not  an  idle  state- 
ment; it  is  the  language  of  Holy  Writ;  yet  that  statement,  too, 
that  law  of  life,  too,  is  now  sought  by  large  elements  of  our 
people  to  be  amended  so  as  to  read  "five  days"  instead  of  six. 
[Applause.] 


All  Men  Should  Work 

The  world  does  not  owe  any  man  a  living;  no  man  born  of 
woman  is  too  good  to  work;  no  woman  who  lives,  no  matter 
how  be  jeweled  her  hands,  is  too  good  to  work  at  some  honest 
calling.  [Applause.]  One  great  trouble  with  the  world  today 
is  that  it  is  trying  to  get  away  from  work.  We  must  teach  a 
new  doctrine ;  we  must  teach  a  new  gospel  in  the  world — that 
every  man  should  work  as  much  as  he  can,  rather  than  as  little 
as  he  can.  [Applause.]  This  struggle,  my  friends,  of  large 
portions  of  our  people  to  work  just  as  little  as  they  can  is  in 
direct  violation  of  this  law  of  our  very  existence.  [Applause.] 
Every  man  must  give  back  to  the  world,  in  service,  more  than 
he  takes  from  the  world.  We  are  all  born  into  the  world  with 


AMERICAN  CITIZENSHIP  755 

a  mission,  with  a  high  duty  to  perform  to  mankind,  and  every 
man  sins  not  only  against  God,  but  his  fellow-man,  when  he  re- 
fuses to  give  back  in  service  more  to  mankind  than  he  takes 
out  of  the  world's  storehouse. 


Union  Violates  American  Principles 

Today  we  find  men  in  large  numbers  who  deny  the  right  to 
some  men  to  work,  unless,  perchance,  they  belong  to  some  par- 
ticular organization.  That  is  in  violation  of  the  spirit  of  our 
institutions.  [Applause.]  It  is  an  attack  upon  their  very  lib- 
erties. The  President  of  this  republic,  the  Governor  of  this 
State,  the  Mayor  of  this  city  or  the  judge  on  the  bench  has  no 
right  to  say  to  any  man  what  calling  he  must  choose,  what 
vocation  he  must  select,  where  he  goes,  whether  he  goes  to  one 
city  or  the  other  to  live,  for  what  employer  he  shall  work  or 
what  his  wages  shall  be.  Whenever  any  man  or  set  of  men 
undertake  to  infringe  upon  the  individual  and  constitutional 
right  of  the  citizen,  he  thereby  assails  one  of  these  pillars  of 
our  Government.  [Applause.]  That  is  a  sacred  right ;  it  is  a 
fundamental  right,  without  which  no  free  government  can 
exist.  [Applause.] 

The  people  of  this  country  have  made  up  their  minds,  as  I 
believe,  once  for  all,  that  they  will  not  surrender  a  hair's 
breadth  of  their  rights  or  liberties  under  the  Constitution  of 
this  republic.  [Applause.] 

The  next  right  that  our  Government  guarantees  to  every 
man  is  the  fruit  of  his  own  toil.  If  a  man  is  required  to  work, 
then  it  necessarily  follows  that  there  will  be  something  pro- 
duced, and  hence  we  say  that  the  laborer  is  worthy  of  his  hire. 
We  say  that  the  man  who  does  not  toil  and  care  for  his  own 
family  is  worse  than  an  infidel.  Wo  say  that  any  man  who  toils 
is  entitled  to  the  fruits  of  his  own  toil,  and  that  it  is  a  crime 
for  any  other  man  against  his  will  to  deprive  him  of  the  fruits 
of  that  toil.  [Applause.] 

Thou  Shalt  Not  Steal 

My  fellow-citizens,  away  back  in  the  beginning  of  time,  when 
the  law  was  first  given  by  Jehovah,  written  upon  a  tablet  of 
stone,  one  of  the  ten  fundamental  laws  that  were  to  regulate 


756         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

the  conduct  of  all  humanity  was  stated  in  these  words :  "Thou 
shalt  not  steal/'  Analyze  that  commandment  and  see  what  it 
means.  It  means  that  one  man  who  by  his  toil  creates  wealth 
is  entitled  to  use  and  enjoy  that  wealth  according  to  his  own 
pleasure  so  long  as  he  does  not  interfere  with  the  rights  of  his 
neighbor.  It  means  that  if  any  other  man,  by  force  or  vio- 
lence, or  against  his  will,  takes  that  property  he  sins  not  only 
against  God  but  against  the  laws  of  man,  based  and  predicated 
upon  the  Book  of  Books. 

We  have  in  this  country  today  a  dangerously  large  element 
of  people  who  do  not  believe  in  private  ownership  of  property. 
They  are  battering  against  this  one  pillar  of  our  institutions. 
They  want  in  a  sort  of  insidious  way  to  attack  it ;  they  do  not 
dare  to  come  out  in  the  open  and  say  that  this  old  principle, 
this  principle  taught  in  Holy  Writ,  this  principle  that  has  been 
demonstrated  by  the  wisdom  of  the  ages  in  the  experience  of 
mankind  to  be  a  sound  one  governmentally — that  the  individual 
shall  be  safe  in  his  property  rights — they  do  not  dare  attempt 
to  sweep  that  away  by  one  foul  blow,  but  they  would  pull  one 
stone  out  of  the  pillar  at  a  time.  They  say  they  believe  in  the 
Government  ownership  of  railroads  and  in  the  nationalization 
of  coal  mines. 


Destruction  of  Republic 

I  say  those  who  are  attacking  this  pillar  of  the  republic  are 
trying  to  pull  out  a  stone  at  a  time.  Government  ownership  of 
railroads  will  be  followed  by  the  Government  ownership  of  the 
coal  mines  and  other  mines,  then  by  Government  ownership  of 
farms  and  then  by  Government  ownership  of  everything.  Then 
the  individual  is  swallowed  up  in  the  mass  and  man  as  a  man 
becomes  a  nonentity. 

That  is  the  object,  not  only  of  thousands,  but  of  hundreds  of 
thousands  of  people  in  this  republic  now,  and  I  tell  you,  my 
fellow-citizens,  it  seems  to  me  that  the  duty  of  the  hour,  the 
imperative,  all-important  duty  of  the  hour,  is  that  every  true 
American  that  loves  his  Constitution  and  his  flag  is  to  stand 
by  the  principles  of  the  fathers  and  put  his  foot  upon 
these  three  fundamental  principles  and  say,  with  old  Andrew 
Jackson :  "By  the  eternal  the  republic  shall  live."  [Applause.] 
When  you  surrender  any  one  of  these  fundamental  rights  of 


AMERICAN  CITIZENSHIP  757 

the  citizen  you  have  surrendered  everything,  and  that  great 
structure,  that  magnificent  structure  of  government,  will  lie  in 
a  heap  of  ruins  all  around  us. 

Tennessee  Awakens 

In  the  State  of  Tennessee  we  have  felt  that  the  proper  thing 
to  do  is  not  to  wait  until  our  institutions  have  already  been 
shaken,  but  to  begin  early  to  warn  the  people  of  our  State 
against  the  dangers  that  threaten  them ;  to  have  them  organize 
themselves  into  law  and  order  leagues;  to  have  them  teach 
the  children  in  every  school  in  Tennessee  the  fundamental 
principles  of  our  Government  and  the  dangers  that  menace  it. 

On  the  14th  of  October  last  a  large  convention  of  representa- 
tive citizens  from  every  section  of  Tennessee  and  from  all 
walks  of  life  gathered  in  the  capital  at  Nashville,  and  as  a 
result  of  that  conference  a  committee  of  15  distinguished  citi- 
zens was  selected.  Those  15  citizens  have  been  carrying  on, 
actively  and  aggressively,  a  law  and  order  program,  the  mean- 
ing of  which  is  that  there  is  no  room  in  Tennessee  for  a 
Bolshevist  or  an  anarchist — [applause] — that  the  law  in  its 
majesty  and  integrity  must  be  upheld  in  every  section  of 
Tennessee;  that  the  white  man  and  the  black  man  shall  have 
full  protection  of  every  constitutional  right  and  guaranty. 
[Applause.]  As  a  result  of  it,  fellow-citizens,  all  danger  of 
anything  that  looked  like  race  trouble  is  passing  away,  and 
today  we  have  in  Tennessee  the  very  best  of  feeling  between 
the  two  races. 

Only  yesterday  I  addressed  quite  a  large  assembly  of  negroes 
and  it  was  heartening  and  reassuring  to  know  the  feeling  of 
kindness  that  exists  there  today  between  the  white  man  and 
the  black  man.  This  is  one  of  the  things  that  is  especially  im- 
portant in  the  South,  and  the  negroes  of  my  State  want  only 
justice,  simply  even-handed  justice,  and  the  best  people  of 
Tennessee  are  determined  to  see  to  it  .that  they  get  it. 
[Applause.] 

Law  and  Order  Movement 

We  have  had  in  that  State  a  law  and  order  week.  Every 
minister  of  the  Gospel,  of  all  creeds  and  sects,  on  November  9, 


758         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

preached  a  sermon  on  the  subject  of  law  and  order  and  plead 
for  the  faith  of  the  fathers.  On  one  day  in  the  week  every 
school  in  Tennessee  had  exercises  of  a  patriotic  character.  The 
teachers  are  teaching  the  children  to  love  the  flag.  The  last 
Legislature,  which  adjourned  some  four  or  five  months  ago,  put 
upon  the  statute  books  a  law,  which  I  was  delighted  to  approve, 
that  forbids  any  alien  who  is  unwilling  to  take  the  oath  of  alle- 
giance to  the  United  States  to  teach  in  any  school  in  Tennessee 
supported  by  public  funds,  from  the  kindergarten  to  the  Uni- 
versity of  Tennessee.  [Applause.]  We  have  cleaned  up  our 
schools,  we  have  had  a  house-cleaning,  and  I  think  it  would 
be  well  for  every  other  institution  to  have  a  house-cleaning 
and  get  rid  of  high-brows  and  parlor  Bolshevists  who  are 
undertaking  to  corrupt  the  minds  of  the  youth  of  America. 
[Applause.]  What  you  would  have  the  next  generation  do 
you  must  teach  in  the  schools  of  the  country  today. 

Virginia's  Declaration  of  Rights 

Early  in  1776,  even  before  Jefferson  wrote  the  Declaration 
of  Independence,  an  important  convention  was  held  in  Virginia 
for  the  purpose  of  enunciating  certain  fundamental  principles 
of  government.  The  document  then  prepared  was  known  as 
the  "Declaration  of  Rights  of  Virginia,"  and  Article  15  of  that 
marvelous  document  reads  thus :  "No  free  government  can  be 
preserved  but  by  a  firm  adherence  to  justice,  moderation,  tem- 
perance, frugality  and  virtue  and  by  frequent  recurrence  to 
fundamental  principles."  My  friends,  that  statement  today  is 
just  as  applicable  as  it  was  the  day  it  was  written  in  1776. 
Patrick  Henry  was  in  that  convention,  Madison  was  there, 
Washington  was  there,  others  of  the  fathers  were  there.  These 
are  words  of  wisdom  and,  in  my  judgment,  we  ought  to  harken 
to  these  words ;  we  ought  to  put  them  into  practice  in  our  daily 
lives  and  in  our  Government.  "No  free  government  can  be 
preserved  but  by  a  firm  adherence  to  justice/'  A  square  deal. 
No  greater  utterance  was  ever  made  by  any  living  man.  That 
is  one  of  the  things  that  we  want  to  put  into  daily  practice  now 
in  every  State  of  this  republic,  in  every  municipal  government, 
and  we  want  to  put  that  into  practice  in  our  industrial  rela- 
tions, man  to  man — even-handed  justice.  "Judge  as  you  would 
be  judged"  is  the  Divine  rule.  In  other  words,  it  is  a  process 


AMERICAN  CITIZENSHIP  759 

of  substitution— put  yourself  in  the  other  man's  place.  I  was 
honored  for  several  years  in  being  a  trial  judge  in  my  State. 
I  never  passed  upon  the  rights  of  a  citizen  without  putting  to 
myself  the  question:  "If  he  were  on  the  bench  and  I  were 
before  the  bar,  how  would  I  expect  this  question  to  be  deter- 
mined, and  what  is  the  eternal  right  of  this  proposition?" 
[Applause.] 

Employer  Must  Face  New  Conditions 

Every  employer  is  required  to  put  that  test,  the  Divine  test, 
to  his  own  conduct,  and  his  own  attitude  and  relations  to  his 
employees :  "If  I  were  the  employed  and  he  were  the  employer, 
what  would  I  expect  him  to  do  ?"  Having  determined  that,  that 
is  the  thing  that  I  will  do,  and  thus  satisfy  the  Divine  law  of 
justice,  without  which,  the  fathers  said:  "No  free  government 
can  be  preserved." 

We  need  this  principle  of  justice  applied  everywhere  through- 
out the  republic,  in  our  daily  transactions  with  our  fellow-men ; 
it  is  absolutely  essential  and  vital  to  the  preservation  of  proper 
relationship  betwen  employer  and  employee. 


Money-Mad  World 

They  not  only  said  that  we  must  firmly  adhere  to  justice, 
but  they  said  that  we  must  firmly  adhere  to  moderation,  tem- 
perance, frugality  and  virtue.  Today  we  see  a  saturnalia  of 
extravagance  throughout  the  world ;  such  a  thing  as  frugality 
seems  to  have  been  lost  from  the  vocabulary  of  the  people  of 
this  country.  There  is  extravagance  of  the  wealth  of  the  world 
at  a  time  when  the  people  of  large  portions  of  the  world  are 
hungry.  It  is  a  crime  against  the  world  to  waste  the  products 
of  human  toil.  We  must  firmly  adhere  to  this  principle  of  fru- 
gality if  we  are  to  save  the  state  and  the  nation. 

We  are  also  told  that  we  must  frequently  recur  to  fundamental 
principles.  It  seems  to  me  that  a  great  many  of  the  modern 
political  heresies  throughout  this  country  are  allowed  to  creep 
into  the  public  mind  because  we  do  not  follow  this  admonition 
of  the  fathers  to  recur  frequently  to  fundamental  principles. 
What  are  these  fundamental  principles  of  the  Government? 
The  fundamental  rights  of  man,  the  individual  rights  of  the 


760         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

citizen.  If  we  will  be  true  to  them  there  is  no  danger  of  the 
acceptance  of  all  these  modern  heresies  that  would  seek  to 
transfer  the  power  and  authority  of  government  from  the  sober 
councils  of  the  courtroom,  the  legislative  hall  or  the  executive 
chamber  to  the  angry  mob  on  the  streets.  No  pure  democracy 
ever  has  been  able  to  survive,  and  none  ever  will.  [Applause.] 
I  am  a  Democrat,  but  I  am  a  Democrat  under  a  republic.  I 
believe  in  a  republican  form  of  government,  in  representative 
government.  I  do  not  believe  in  the  government  of  the  mob 
on  the  streets. 

A  Dangerous  Fallacy 

We  have  men  in  these  latter  days  who  are  advocating  the 
recall  of  judges  and  the  revision  by  the  populace  of  the  decrees 
of  courts.  There  was  never  a  greater  governmental  fallacy, 
there  never  was  anything  suggested  to  a  free  people  that  was 
more  directly  in  conflict  with  the  fundamental  principles  of 
this  Government.  [Applause.]  Jefferson  believed  and  taught 
that  the  people  are  capable  of  self-government,  not  directly, 
but  through  their  chosen  representatives — in  other  words,  that 
the  people  are  capable  of  selecting  a  judge  who  will  determine 
all  controversies  justly  and  equitably;  but  he  never  taught  that 
the  mob  was  capable  of  determining  for  itself  any  question 
justly  and  equitably. 

I  say  these  governmental  heresies  that  are  creeping  into 
our  system,  especially  in  the  municipality  and  the  state,  are 
destined  to  bear  the  bitterest  of  bitter  fruit.  Those  who  seem 
to  believe  that  they  are  getting  more  rights  are,  as  a  matter  of 
fact,  endangering  the  very  life  of  the  republic  they  would  up- 
hold and  sustain. 

Tennessee  has  had  the  honor  of  furnishing  three  Presidents 
of  the  United  States.  The  first  one  she  furnished  (Andrew 
Jackson)  sprang  from  a  log  cabin  and  from  poverty.  The 
second  was  James  K.  Polk.  The  last  was  a  tailor  (Andrew 
Johnson)  who  could  neither  read  nor  write  when  he  married, 
and  whose  wife  taught  him  the  rudiments  of  an  education. 
No  man  who  ever  lived  in  America  loved  the  Constitution  and 
the  flag  better  than  Andrew  Jackson.  It  was  a  frequent  saying 
of  Andrew  Johnson,  the  great  Commoner,  as  he  went  over  the 
State  of  Tennessee,  loved  and  admired  by  everybody,  whether 


AMERICAN  CITIZENSHIP  761 

they  agreed  with  him  or  disagreed  with  him  as  to  his  particular 
political  views,  that  when  he  died  he  wanted  his  head  pillowed 
on  the  Constitution  of  his  country  and  his  body  wrapped  in  its 
flag,  and  when  the  old  patriot  died  he  was  thus  buried. 

Need  More  Patriotism 

My  fellow-citizens,  if  we  had  more  men  in  America  today 
who  loved  the  flag,  who  loved  the  Constitution  like  a  bride- 
groom loves  his  bride,  who,  when  they  are  buried,  want  their 
heads  pillowed  upon  the  Constitution  and  their  bodies  wrapped 
in  the  folds  of  the  flag,  we  would  have  a  different  country. 
That  is  the  great  need  of  the  hour. 

We  are  told  by  the  radicals  that  this  Government  of  ours 
must  be  destroyed.  We  are  told  by  them  that  this  great  Gov- 
ernment is  a  government  of  the  masters  of  industry.  We  are 
told  that  the  Bible,  on  which  our  great  Government  rests,  is  a 
mere  fable,  and  hence  they  would  disregard  it.  For  the  last 
few  weeks  a  great  work  is  being  done  by  the  Attorney-General 
of  the  United  States,  Hon.  A.  Mitchell  Palmer,  in  rounding  up 
the  "Reds"  preparatory  to  their  deportation.  I  hope  that  every 
"Red"  in  this  country,  from  one  end  of  it  to  the  other,  will  be 
gathered  up  with  all  possible  haste  and  deported  to  the  land 
whence  they  came.  [Applause.]  They  ought  never  to  have 
been  allowed  to  come  to  our  fair  shores.  [Applause.]  But 
now  that  they  are  here,  our  imperative  duty  is  to  deport  them 
with  all  possible  haste.  Another  thing,  that  is  absolutely 
necessary  is  legislation  that  will  empower  the  courts  of  this 
country,  State  and  Federal,  to  annul  orders  and  judgments 
under  the  naturalization  law  and  whenever  there  is  found  any 
foreigner  who  has  secured  his  naturalization  by  fraud  and  who 
is  still  an  anarchist  or  syndicalist,  the  judgment  should  be 
vacated  so  that  he  might  be  deported,  [Applause.] 

Treason  Should  Be  Punished 

Strange  as  it  may  seem,  some  native-born  Americans  have 
embraced  this  false  doctrine.  They,  too,  must  be  dealt  with  as 
criminals.  They  are  criminals.  Where  they  need  to  be  is  in 
the  jails  or  penitentiaries  of  this  country.  [Applause.] 

My  friends,  we  have  reached  that  stage  in  our  development 
when  we  must  have  some  additional  definition  of  treason,  the 


762         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

highest  crime  known  to  the  law.  We  have  allowed  the  enemies 
of  our  institutions  entirely  too  much  latitude  under  the  Bill  of 
Rights,  guaranteeing  free  speech  and  freedom  of  the  press.  We 
must  go  after  those  who  are  teaching  the  doctrines  taught  by 
the  I.  W.  W.,  who,  a  few  days  ago,  over  at  Centralia,  Wash- 
ington, when  they  saw  a  few  of  the  remnant  of  the  American 
army  marching  along  the  street  in  celebration  of  Armistice 
Day,  could  not  resist  the  temptation  to  shoot  them  down  in  cold 
blood.  They  say  that  they  are  anti-patriots;  they  say  they 
hate  militarism.  There  is  nothing  in  the  world  that  so  enrages 
one  of  them  as  the  uniform  of  his  country,  unless  it  be  the  flag 
of  his  country.  It  has  been  said  that  the  flag  of  our  country, 
the  Stars  and  Stripes,  is  the  most  sacred  emblem  known  to 
man,  save  the  Cross  alone. 

The  American  Legion 

The  I.  W.  W.'s  at  Centralia,  Washington,  have  made  an  issue 
in  this  country.  They  have  joined  issue  with  the  American 
Legion.  Let  me  say  that  I  trust  every  young  man  in  America 
who  is  eligible  to  membership  in  the  American  Legion  will  join 
it  promptly,  for  this  patriotic  organization  has  unqualifiedly 
endorsed  this  movement  to  rid  the  country  of  anarchists  and 
Bolshevists,  and  the  head  of  the  organization  in  Tennessee  has 
notified  me  that  if  Tennessee  is  attacked  by  these  emissaries  of 
evil  all  that  is  necessary  is  simply  to  send  him  a  telephone 
message  and  that  the  boys  who  wore  the  khaki  over  there  and 
helped  to  win  the  victory  for  the  world  over  Germany  are  ready 
to  go  at  a  moment's  warning,  and  if  they  cannot  get  guns  they 
are  ready  to  go  with  clubs  or  anything  else  they  can  get  in  their 
hands  to  fight  the  enemies  of  our  Government.  [Applause.] 

These  young  men  are  the  hope  of  the  country.  [Applause.] 
We  are  proud  of  them.  General  Joffre  said  in  the  presence  of 
one  of  the  noted  ministers  of  Nashville,  who  was  over  there  in 
Y.  M.  C.  A.  work,  that  the  first  battle  of  the  Marne  saved 
France  and  that  the  battle  of  Chateau-Thierry  saved  the  world, 
and  he  might  have  added  that  the  American  soldier  made  vic- 
tory at  Chateau-Thierry  possible.  [Applause.]  What  a  great 
honor  it  is  to  be  eligible  to  membership  in  the  American  Legion ! 
And,  now  that  these  boys  of  ours  have  made  this  great  fight, 
now  that  they  have  covered  themselves  and  us  and  the  Ameri- 


AMERICAN  CITIZENSHIP  763 

can  Army  with  imperishable  fame  and  unspeakable  glory,  how 
ignominious  and  perfidious  it  would  be  for  us  to  allow  these 
new  enemies  of  our  institutions,  preaching  the  same  old  doc- 
trine that  might  makes  right,  to  overturn  these  institutions 
that  these  boys  of  ours  saved!  Germany  proclaimed  to  the 
world  that  might  makes  right ;  your  anarchist  proclaims  to  the 
world  that  might  makes  right.  W.  Z.  Foster,  who  is  one  of  the 
leading  spirits  in  the  steel  strike  today,  in  1912,  in  writing 
upon  this  subject,  used  these  words :  "Might  is  right."  It  is 
the  same  old  doctrine  that  our  boys  combated  over  yonder 
that  we  are  called  upon  to  face  here  again  in  this  country. 
[Applause.] 

More  Law  and  Order  Leagues  Needed 

There  are  two  flags  here  in  this  country — one  is  Old  Glory 
and  the  other  is  the  red  flag  of  anarchy.  Every  man  and 
woman  among  us  is  given  an  opportunity  to  take  sides.  "He 
that  is  not  for  me  is  against  me ;"  he  that  is  not  for  the  flag  is 
against  the  flag ;  he  that  is  not  for  the  Constitution  is  an  enemy 
of  the  Constitution.  We  ought  to  learn  where  these  enemies 
are ;  we  ought  to  ask  the  people  of  this  country  to  stand  out  in 
the  open  and  be  counted.  Let  us  see  where  they  are.  I  wish 
that  every  State  in  this  Union  would  organize  Law  and  Order 
Leagues  or  American  Legions,  or  call  them  whatever  you  will, 
and  give  every  man  a  chance  to  become  a  member  and  if  he 
won't  then  it  would  be  known  that  he  is  an  enemy. 

The  plans  outlined  by  Mr.  Foster  some  years  ago  in  his 
writings  were  to  create  all  the  discontent,  unrest,  class  hatred, 
and  whenever  it  was  possible  to  have  local  strikes  here  and 
there,  and  by  and  by  a  general  strike,  then  following  that  the 
revolt  and  then  the  revolution,  and  then  to  overturn  the  state. 
It  is  remarkable  how  this  man's  plans  have  been  developed,  and 
with  what  exactness  they  have  been  worked  out  in  these  latter 
years.  Mr.  Foster  said  in  1912  that  our  industries  are  so  deli- 
cately interwoven  that  a  general  strike  in  transportation,  in 
coal  mining  or  in  steel  making  would  so  disorganize  industry 
in  this  country  and  put  so  many  people  out  of  employment  that 
a  revolution  would  be  made  possible.  Notice,  he  names  those 
three,  and  two  out  of  those  three  today  are  out  on  strike,  and 
Mr.  Foster,  speaking,  it  seemed,  almost  with  the  words  of 


764         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

prophecy  as  to  how  this  thing  would  come  about,  said  that  the 
way  was  for  the  radicals  to  ingratiate  themselves  in  the  unions 
and  take  charge  of  things  and  ultimately,  by  means  of  the 
general  strike,  bring  about  the  revolution.  His  dream  is,  as  he 
says,  a  country  without  a  God  and  without  a  state  and  without 
law.  Although  now  he  disavows  with  his  lips  these  utterances, 
yet  in  his  actions  he  is  putting  them  into  practice  every  day. 

I  tell  you,  my  fellow-citizens,  the  duty,  it  seems  to  me,  that 
devolves  upon  us  is  to  warn  the  honest,  patriotic,  liberty-loving 
laboring  man,  whether  he  is  in  the  union  or  not,  of  the  dangers 
that  lie  out  in  front  of  him  if  he  follows  these  radical  leaders. 
I  believe  but  a  very  small  percentage  of  union  labor  in  this 
country  has  any  radical  ideas  or  tendencies  at  all.  I  believe  a 
very  large  majority  of  them  are  just  as  patriotic  as  any  of  us, 
but  the  danger  lies  in  the  fact  that  some  of  these  radicals  have 
gained  places  of  power  in  labor  organizations  and  are  using 
this  power  to  the  country's  hurt. 


Americans  Should  Organize 

If  I  could  say  one  word  that  would  be  worth  your  carrying 
home  with  you,  it  would  be  that  you  go  to  your  respective 
States ;  that  you  confer  with  the  authorities  there ;  that  you 
organize  the  patriotic  citizens  and  then  have  these  organiza- 
tions worked  out  to  the  minutest  detail;  have  them  spread  all 
over  your  State,  to  every  town,  every  hamlet,  every  school- 
house,  every  community  center,  and  by  and  by  such  a  mighty 
force  of  patriotism  will  thus  be  generated  that  in  the  near 
future  anarchy  will  be  a  thing  of  the  past  in  America. 
[Applause.] 


"Old  Glory"  Still  Waves 

Our  State  has  been  likened  to  a  ship ;  it  is  a  beautiful  simile. 
This  ship  of  state  now  is  riding  the  billows,  the  waves  are  roll- 
ing high,  the  storm  is  all  about  us,  the  lightnings  are  flashing, 
the  dark  clouds  are  rolling  over  us,  there  is  mutiny  aboard  the 
ship,  but  "Old  Glory"  is  still  waving  at  the  masthead  and,  not- 
withstanding the  fact  that  these  mutineers  have  a  flag  there, 
notwithstanding  the  fact  that  they  have  bombs  and  stilettos, 
notwithstanding  the  fact  that  many  of  them  are  assassins  at 


AMERICAN  CITIZENSHIP  766 

heart  and  red-handed  murderers  and  that  they  are  seeking  to 
destroy  the  old  ship,  we  are  going  to  ride  on  through  the  storm 
in  safety.  It  may  be  a  year,  five  years  or  ten  years,  but  we  are 
going  to  ride  through  the  storm  out  into  the  sea,  the  sunlit 
sea  of  peace  and  justice  and  happiness  and  contentment.  Then, 
indeed,  will  we  be  able  to  congratulate  ourselves  that  we  are 
living  under  the  greatest  Government  on  the  face  of  the  earth. 
[Applause.] 


766         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


GRAPHITES  AND  BOND  CLAYS  FOR  CRUCIBLE  MAKING 

PURPOSES1 

By  R.  T.  STULL,  U.  S.  Bureau  of  Mines 
(Read  before  The  American  Mining  Congress,  St.  Louis,  Mo.,  1919.) 

The  average  composition  of  a  graphite  crucible  mixture 
would  fall  within  the  limits  50  to  55  graphite,  40  to  35  bond 
clay,  0  to  10  sand  and  0  to  10  pot  shell. 

Graphite  crucibles  lend  themselves  admirably  to  the  melting 
and  pouring  of  metals.  On  account  of  the  high  graphite  con- 
tent, the  crucible  is  a  good  conductor  of  heat,  which  assists 
rapid  heating  and  melting  of  the  charge.  The  graphite  cruci- 
ble withstands  sudden  temperature  changes  without  serious 
cracking  or  spalling  when  drawn  from  the  furnace  and  poured. 
The  composition  when  properly  made  is  such  that  it  does  not 
fuse  at  the  highest  temperatures  employed  in  the  production 
of  crucible  steel.  Graphite  is  more  resistant  to  slagging  action 
than  clay  and  maintains  reducing  conditions,  which  prevents 
oxidation  of  the  metal  in  contact  with  it.  On  account  of  the 
smooth,  unctuous  properties  of  the  graphite  grains,  the  metal 
pours  readily  without  sticking  to  the  walls  of  the  crucible. 

The  functions  of  the  clay  are  to  impart  plasticity  to  the 
crucible  mixture  in  order  that  it  may  be  moulded,  and  to  bind 
the  graphite  grains  together  and  impart  strength.  The  func- 
tion of  sand,  which  is  sometimes  used  in  crucible  mixtures, 
has  not  been  definitely  understood.  Its  principal  value  seems 
to  lie  in  the  fact  that  it  is  a  gritty,  non-plastic  material  and 
tends  to  overcome  the  slipperiness  or  sliding  tendency  of  the 
graphite  during  moulding  of  the  crucible,  and  thereby  reduces 
flaws  by  reducing  the  tendency  to  laminate.  Athough  the 
sand  is  subjected  to  the  sudden  volume  changes  which  quartz 
undergoes  during  heating  and  cooling,  the  amount  of  sand 
present  is  so  small  that  the  strains  set  up  by  the  volume 
changes  are  not  sufficient  to  cause  cracking  of  the  crucible. 

The  principal  function  of  pot  shell  (discarded  crucibles 
crushed  and  screened)  is  very  similar  to  that  of  sand,  in  that 


By  permission  of  the  Director,  U.  S.  Bureau  of  Mines. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  767 

it  assists  in  overcoming  laminations  during  moulding.  It  has 
the  added  advantages  of  imparting  better  heat  conductivity, 
and  is  not  subjected  to  the  volume  changes  which  quartz  sand 
undergoes,  hence  could  be  used  in  larger  quantities. 

The  two  important  constituents  to  be  considered  in  the  com- 
position of  graphite  crucibles  are  suitable  bond  clays  and  suit- 
able graphites.  Specifications  for  the  graphite  require  that 
it  shall  contain  not  less  than  85  per  cent,  graphitic  carbon,  and 
shall  contain  very  little  or  no  material  passing  the  100  mesh 
screen.  No  uniform  specifications  exist  for  the  bond  clay, 
pot  shell  nor  sand,  since  each  crucible  manufacturer  selects 
these  materials  according  to  his  requirements. 

Up  to  the  year  1914,  the  majority  of  graphite  crucibles 
made  in  America  were  composed  largely  of  imported  materials. 
It  was  considered  that  crucibles  made  from  Ceylon  graphite 
bonded  with  German  Klingenberg  clay  were  superior  to  those 
made  from  domestic  materials.  When  the  war  came  on  the 
graphite  crucible  situation  became  rather  acute.  The  importa- 
tion of  German  bond  clay  was  shut  off  and  the  stocks  on  hand 
were  rapidly  depleted.  The  abnormal  demand  for  crucible 
steel,  brasses  and  other  alloys  greatly  increased  the  demand 
for  graphite  crucibles. 

When  the  United  States  became  involved  in  the  war  it  was 
found  necessary  to  curtail  imports  in  order  to  conserve  more 
ships  to  carry  men  and  material  to  France.  Importation  of 
Ceylon  graphite  was,  therefore,  reduced  and  crucible  makers 
were  restricted  to  the  use  of  domestic  graphite  up  to  a  maxi- 
mum of  25  per  cent. 

When  the  stocks  of  Klingenberg  clay  were  exhausted  it  was 
necessary  to  employ  domestic  clays.  There  are  no  two  clays 
identically  the  same  in  all  their  physical  properties,  and  since 
some  crucible  makers  had  depended  largely  upon  imported 
clays,  they  were  not  familiar  with  the  domestic  clays  and  found 
it  necessary  to  do  considerable  experimenting  in  order  to 
secure  a  well-balanced  mixture  and  a  satisfactory  crucible. 

It  was  fortunate  that  there  were  comparatively  large  stocks 
of  Ceylon  graphite  in  the  United  States  when  the  embargo 
came.  Each  crucible  maker  found  it  necessary  to  work  out 
his  own  salvation  individually.  He  scarcely  had  the  bond  clay 


768         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

question  well  in  hand  before  he  was  required  to  substitute  a 
certain  amount  of  domestic  flake  graphite  for  the  Ceylon. 

The  abnormal  demand  for  metals  necessitated  a  speeding  up 
in  production,  and  four  or  five  melts  were  made  in  a  crucible 
in  the  same  time  that  three  were  formerly  made,  which 
materially  shortened  their  life. 

The  workmen  in  a  very  large  proportion  of  the  foundries 
were  paid  on  tonnage  output,  and  it  was  not  of  primary  impor- 
tance to  them  whether  one  or  ten  crucibles  were  required  to 
produce  a  definite  quantity  of  metal. 

The  increase  in  the  cost  of  crucible  materials  and  labor  and 
the  increase  in  the  demand  for  crucibles  naturally  brought 
about  a  substantial  increase  in  the  selling  price  of  the  crucible. 

Part  of  the  foundries  were  operating  under  "cost  plus"  con- 
tracts, and  the  demands  for  the  metal  and  its  immediate  de- 
livery were  so  great  that  foundries  received  any  price  within 
reason  that  they  cared  to  ask  for  their  products.  This  condi- 
tion resulted  substantially  in  the  elimination  of  competition, 
and  the  number  of  crucibles  used  and  their  cost  per  unit  of 
metal  produced  did  not  receive  serious  consideration. 

The  necessity  of  the  crucible  maker  of  substituting  domestic 
clays  and  graphites  for  the  imported  kinds  before  he  was  given 
opportunity  to  experiment  in  order  to  adjust  his  mixtures  and 
working  conditions,  the  speeding  up  in  the  production  of  metals 
and  its  consequent  increased  severity  upon  the  crucible,  to- 
gether with  the  indifference  of  the  workmen,  all  contributed 
to  decrease  the  life  of  the  crucible  from  5  per  cent,  to  as  much 
as  40  per  cent,  as  compared  to  pre-war  times. 

At  the  present  time,  when  conditions  are  swinging  back  to 
normal,  it  is  to  be  expected  that  the  average  life  of  the  crucible 
has  increased,  and  such  is  the  case.  One  of  the  largest  pro- 
ducers of  crucible  steel  reports  that  his  foundries  are  re- 
ceiving as  good  service  from  crucibles  now  as  they  did  in 
pre-war  times. 

So  far  as  the  writer  has  been  able  to  learn,  no  Klingenberg 
clay  has  been  used  by  crucible  manufacturers  for  more  than 
a  year.  With  the  exception  of  one  English  clay,  the  data  at 
hand  indicates  that  all  domestic  made  graphite  crucibles  at  the 
present  time  are  bonded  with  American  clays. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  769 

There  are  a  number  of  domestic  bond  clays  in  use  by  differ- 
ent crucible  manufacturers,  and,  since  the  physical  properties 
of  these  clays  vary  considerably,  it  is  to  be  expected  that 
crucibles  in  which  they  are  used  will  also  vary  in  service- 
ability. 

That  some  graphite  crucibles  containing  domestic  bond  clays 
are  giving  as  good  service  as  those  formerly  containing  the 
Klingenberg  clay  is  evident,  and  careful  experiments  made 
by  the  Ceramic  Experiment  Station  of  the  U.  S.  Bureau  of 
Mines  indicate  that  there  are  two  domestic  bond  clays  superior 
to  the  Klingenberg  clay  for  brass-melting  crucibles,  and  recent 
tests  on  a  number  of  crucibles  under  steel-melting  practice 
show  13  different  domestic  clays  to  be  superior  in  service  to 
the  Klingenberg  clay. 

Independence  so  far  as  bond  clays  for  the  manufacture  of 
graphite  crucibles  is  concerned  is  assured,  and  it  is  a  foregone 
conclusion  that  the  grip  which  Klingenberg  clay  once  held 
upon  the  crucible  trade  has  been  broken.  The  sentiment 
among  crucible  makers  seems  to  be  that  they  will  never  return 
to  the  use  of  Klingenberg  clay. 

Before  the  Shipping  Board  could  intelligently  restrict  im- 
portations on  graphite  it  was  necessary  to  know  to  what 
extent  domestic  graphite  could  be  substituted  for  the  imported 
varieties.  No  data  on  the  subject  was  available,  and  the 
opinions  expressed  by  crucible  manufacturers  at  the  hearings 
indicated  that  it  would  be  detrimental  to  substitute  domestic 
flake  for  the  Ceylon  graphite. 

In  the  graphite  crucible  investigations  undertaken  by  the 
Ceramic  Experiment  Station  of  the  U.  S.  Bureau  of  Mines  the 
first  problem  considered  was  to  determine  the  effect  upon  the 
life  of  the  crucible  of  substituting  Canadian  and  Alabama 
graphites  for  the  Ceylon. 

Four  series  of  crucibles 2  were  tested  in  two  different  brass 
foundries  on  three  different  brasses.  The  first  series  consisted 
of  seven  members  marked  Nos.  50  to  56,  inclusive.  Nos.  50 
to  53  represented  mixtures  in  which  Ceylon  graphite  was 
replaced  by  Canadian  flakes  up  to  25  per  cent.  Canadian.  Mem- 
bers 54,  55  and  56  contained  25  per  cent.  Canadian  graphite 


2  Stull,  R.  T.,  "Behavior  under  Brass  Foundry  Practice  of  Crucibles  Containing  Ceylon, 
Canadian  and  Alabama  Graphites,"  Jour,  of  the  American  Ceramic  Society,  Vol.  2,  No.  8, 
March,  1919. 


770         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  75  per  cent.  Ceylon,  and  were  made  for  the  purpose  of 
determining  the  effect  of  varying  the  bond  clay  content.  The 
compositions  of  the  crucibles  of  Series  I  are  given  in  table  1. 

TABLE  l 

Composition,  Series  I 

Per  Cent. 

Mark                                 No.  50  No.  51  No.  52  No.  53  No.  54  No.  55  No.  56 

Ceylon  graphite 55.0      49.5      45.4      41.3  37.5  37.5  37.5 

Canadian  graphite 5.5        9.6       13.7  12.5  12.5  12.5 

Dorset   ball   clay 35.0      35.0      35.0      35.0  35.0  37.5  40.0 

Pot  shell 10.0       10.0       10.0       10.0  10.0  10.0  10.0 

Georgia   kaolin 5.0  2.5 

Per  cent.  Ceylon 

graphite   100         90          82%      75          75          75          75 

Per  cent.  Canadian 

graphite   0         10         17%      25         25         25         25 

Ten  No.  70  size  crucibles  were  made  from  each  different 
batch  composition,  and  were  tested  on  two  different  brasses 
called  No.  3  and  Ml  in  foundry  No.  1.  Compositions  of  the 
brasses  are  given  in  table  2. 

TABLE  2 

Brass  Compositions 

No.  3  Ml 

Per  Cent.  Per  Cent. 

Copper 78.00  71.00-73.00 

Zinc 12.00  19.25-21.25 

Lead 7.00  5.50-  6.50 

Tin   3.00  1.50-  2.50 

The  foundry  operated  a  battery  of  36  pit  furnaces  of  the 
natural  draft  type  for  a  period  of  12  hours  per  day  on  coke, 
which  must  be  clean,  hard  and  low  in  sulphur.  The  fire  was 
kindled  in  the  morning  and  a  layer  of  coke  placed  on  top.  The 
crucible  was  set  on  the  fuel  bed  and  a  mixture  of  coarse  and 
fine  coke  packed  in  the  space  between  the  crucible  and  the 
inner  furnace  wall.  When  the  crucible  attained  a  red  heat  a 
ring  cut  from  the  upper  part  of  a  discarded  crucible  was  placed 
on  top  to  prevent  notching  and  the  charge  introduced. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  771 

After  the  crucible  was  charged,  it  usually  required  from 
to  2  hours  to  melt  and  heat  the  metal  to  the  proper  pouring 
temperature.  When  ready  for  pouring,  the  crucible  was  re- 
moved from  the  furnace  by  well-fashioned  tongs  of  the  grab 
type  and  lowered  into  a  shank  and  carried  to  the  moulds.  If 
the  metal  was  too  hot  for  pouring,  it  was  cooled  by  inserting 
a  cold  iron  bar.  The  crucible  was  returned  to  the  furnace 
after  pouring  and  recharged.  When  the  pouring  temperature 
was  correct  upon  removal  of  the  crucible  from  the  furnace, 
the  whole  operation  of  removing,  pouring  and  returning  the 
crucible  to  the  furnace  required  about  6  to  7  minutes,  during 
which  operation  the  crucible  cooled  to  a  dull  red  or  even  black 
heat. 

TABLE  3 

Tests  on  Series  I 
Average  Number  of  Heats 

On  No.  3  On  Ml  Average  of 

Mark  Brass  Brass  No.  3  and  Ml 

No.   50 13.17  33.75  23.46 

No.   51 9.75  33.17  21.46 

No.   52 11.17  30.00  20.58 

No.   53 8.83  18.00  13.41 

No.   54 5.71  18.00  11.85 

No.   55 8.57  18.33  13.45 

No.   56 7.71  25.33  16.52 

The  No.  3  brass  was  more  severe  on  the  crucibles  than  Ml. 
When  the  charge  had  melted  a  shovel  of  charcoal  and  a  hand- 
ful of  carbonate  of  soda  were  thrown  on  top,  while  "Hilton's" 
brass  cleaner  was  used  in  Ml.  The  fluxing  action  of  the  car- 
bonate of  soda  produced  a  strong  corroding  action  on  the  bond 
clay  in  the  crucible,  whereas  "Hilton's"  brass  cleaner  attacked 
the  crucible  very  little. 

The  average  life  of  the  crucibles  of  Series  I  expressed  in  the 
number  of  heats  the  crucibles  withstood  before  failing  is  given 
in  table  3. 

The  number  of  heats  reported  under  the  average  for  No.  3 
and  Ml  brasses  represents  the  average  for  10  crucibles  tested 
for  each  different  crucible  member  of  the  series.  A  falling  off 
in  the  serviceability  of  the  crucibles  is  noticeable  with  replace- 
ment of  Ceylon  graphite  by  Canadian  flake.  In  No.  50  the 


772         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

graphite  was  entirely  Ceylon.  In  No.  53  the  graphite  portion 
consisted  of  75  per  cent.  Ceylon  and  25  per  cent.  Canadian.  As 
the  Canadian  graphite  increased  at  the  expense  of  the  Ceylon 
up  to  25  per  cent,  replacement,  there  was  a  falling  off  in  the 
life  of  the  crucibles.  The  life  of  the  crucibles  decreased  nearly 
33  per  cent,  on  No.  3  brass,  46%  per  cent,  on  brass  Ml,  and 
nearly  43  per  cent,  on  the  average  for  both  brasses. 

Series  II 

Series  II  consisted  of  two  members,  Nos.  58  and  59,  and  was 
made  for  the  purpose  of  comparing  the  performance  of  cruci- 
bles containing  100  per  cent.  Canadian  graphite  to  those  con- 
taining 75  per  cent.  Ceylon  and  25  per  cent.  Canadian  graphite. 
Fifteen  crucibles  of  each  of  Nos.  58  and  59  were  tested  on  a 
brass  of  the  composition  of  70  per  cent,  copper  and  30  per  cent. 
zinc.  About  half  the  charge  was  scrap  and  half  new  metal. 
Salt  and  charcoal  were  used  as  flux. 

The  compositions  of  the  crucibles  are  given  in  table  4. 

TABLE  4 

No.  58  No.  59 

Ceylon  graphite 41.25 

Canadian   graphite 55.00  13.75 

Ball  clay 35.00  35.00 

Pot    shell 5.00  5.00 

Sand 5.00  5.00 

The  crucibles  were  tested  in  foundry  No.  2,  which  operated 
64  natural  draft  coke-fired  pit  furnaces.  The  operations  were 
very  similar  in  this  foundry  to  those  in  foundry  No.  1,  except 
that  no  protecting  ring  was  used  in  charging  the  crucibles. 
The  crucibles,  therefore,  became  considerably  worn  down  and 
notched  during  charging.  Considerable  care  was  exercised  in 
handling  the  crucibles  in  foundry  No.  1,  whereas  in  foundry 
No.  2  rough  handling  seemed  to  be  the  rule. 

The  gripping  portion  of  the  tongs  was  narrow  and  cut  into 
the  crucible  when  undue  pressure  was  applied,  and  was  respon- 
sible for  shortening  the  life  of  the  crucible.  No  pouring  shank 
was  used,  but  instead  the  crucible  was  carried  and  poured  by 
the  lifting  tongs.  After  pouring  the  crucible  was  loosened 
from  the  tongs  and  dragged  back  across  the  floor  and  set  in 
the  furnace  for  recharging. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  773 

The  average  number  of  heats  for  the  15  crucibles  of  each 
of  the  members  was :  No.  58,  12.13  heats ;  No.  59,  12.60  heats. 
The  results  show  a  difference  of  less  than  %  heat.  Crucibles 
No.  58,  containing  all  Canadian  graphite,  gave  nearly  as  good 
service  as  No.  59,  containing  75  per  cent.  Ceylon  and  25  per 
cent.  Canadian  graphites. 

Series  III 

Series  III  was  made  in  order  to  observe  the  effect  on  the  life 
of  crucibles  by  replacing  Ceylon  graphite  by  Alabama  flake 
graphite.  The  series  consisted  of  five  members,  four  crucibles 
of  No.  60  size  being  tested  for  each  member.  The  crucibles 
were  tested  in  foundry  No.  1  on  No.  3  and  Ml  brasses.  The 
tongs  were  fashioned  to  handle  No.  70  size  crucibles,  and  the 
No.  60  crucibles  suffered  more  or  less  from  unequal  squeezing. 
Table  5  gives  the  batch  compositions  of  Series  III. 

TABLE  5 
Compositions,  Series  III 

Al  A2  A3  A4  A5 

Ceylon  graphite 55.0  42.5  30.0  17.5 

Alabama  graphite 12.5  25.0  37.5  53.0 

English  ball  clay 20.0  20.0  20.0  20.0  20.0 

Mississippi  bond  clay 10.0  10.0  10.0  10.0  10.0 

Kentucky  ball  clay 5.0        5.0  5.0  5.0  5.0 

Illinois  kaolin 5.0        5.0  5.0  5.0  7.0 

Glass  sand 5.0        5.0  5.0  5.0  5.0 

The  results  of  the  tests  given  in  table  6  express  the  average 
number  of  heats  on  the  two  different  brasses  and  on  the  aver- 
age for  both. 

TABLE  6 

Tests,  Series  III 
Average  Number  of  Heats 

On  Brass      On  Brass  Average  on 

No.  3  Ml  No.  3  &  Ml 

Al 7.0  8.5  7.75 

A2 8.0  11.0  9.75 

A3 11.5  24.0  17.75 

A4 8.5  20.0  14.25 

A5..                                                     13.5  28.5  21.00 


774         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  results  indicate  an  improvement  in  the  life  of  the 
crucible  on  the  substitution  of  Alabama  graphite  for  the  Cey- 
lon. However,  since  only  four  crucibles  of  each  different  com- 
position were  tested,  the  number  of  crucibles  tested  was 
altogether  inadequate  from  which  conclusions  can  be  definitely 
drawn.  However,  it  can  be  said  that  the  Alabama  flake 
graphite  is  very  promising  as  a  high-grade  crucible  material. 

Series  IV 

Ceylon  graphite  in  its  natural  state  occurs  in  more  or  less 
massive  form  and  can  be  crushed  and  screened  to  almost  any 
desired  degree  of  fineness,  giving  a  product  of  a  granular  or 
splintery  structure.  On  the  other  hand,  the  Alabama  graphite 
when  prepared  for  market  seldom  exceeds  20  mesh  in  fineness 
and  occurs  in  thin,  flatplate-like  flakes.  The  superior  cruci- 
ble making  properties  claimed  for  Ceylon  graphite  is  said  to 
be  due  largely  to  its  grain-like  and  splinter-like  structure  when 
prepared  for  crucible  making. 

If  the  granular  form  is  superior  to  the  flake  form  for  cruci- 
ble purposes,  it  was  thought  that  if  the  Alabama  flake  graphite 
<jould  be  converted  to  the  granular  form  its  crucible  making 
properties  would  be  improved. 

Two  hundred  pounds  of  Alabama  flake  graphite  were  con- 
verted to  the  granular  form  in  the  following  manner.3  A 
mixture  of  3  parts  Alabama  flake  between  20  and  100  mesh 
and  1  part  dust  passing  100  mesh  was  briquetted  with  15  per 
cent,  coal  tar  binder  under  a  pressure  of  5,000  pounds  per 
square  inch.  The  briquettes  were  coked  at  1,000°C.,  crushed 
and  screened  through  16  mesh  and  passed  over  the  100  mesh 
screen  to  remove  the  excess  fines. 

In  Series  IV  the  artificially  prepared  granular  graphite  re- 
placed the  Ceylon.  It  was  a  duplicate  of  Series  III,  except  that 
the  prepared  granular  Alabama  graphite  replaced  the  natural 
flake.  Series  III  and  IV,  therefore,  serve  for  comparing  the 
performances  of  Ceylon,  Alabama  flake  and  prepared  Alabama 
grain  graphites.  In  order  to  be  comparable,  the  Ceylon 
graphite  was  graded  in  size  in  order  to  give  the  same  screen 
analysis  as  the  prepared  Alabama  granular  graphite.  The 


8  Stull,  R.  T.  and  Schurecht,  H.   G.,  "Effect  of  Variable  Pressure  and  Tar  Content  on 
the  Briquetting  of  Alabama  Graphite,"  Jour.  Am.  Ceramic  Soc.,  Vol.  2,  No.  5,  May,  1919. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  775 

Alabama  flake  was  used  as  prepared  for  the  market.  The 
screen  analyses  of  the  three  graphites  are  given  in  table  7, 
and  the  batch  compositions  of  the  crucibles  in  table  8. 

TABLE  7 
Screen  Analysis 

Prepared  Natural 

Alabama  Ceylon  Alabama 

Between  16  and    20  mesh 16.0  16.0                  0.0 

20  and    40     "     25.0  25.0                11.0 

40  and  100     "     55.0  55.0                85.5 

Through  100  mesh 4.0  4.0                  3.5 

TABLE  8 
Compositions,  Series  IV 

Al  Bl  B2  B3  B4 

Ceylon  graphite 55.0  42.5  30.0  17.5 

"Coked"   Alabama  graphite 12.5  25.0  37.5  53.0 

English   ball    clay 20.0  20.0  20.0  20.0  20.0 

Mississippi  bond  clay 10.0  10.0  10.0  10.0  10.0 

Kentucky  ball  clay 5.0  5.0  5.0  5.0  5.0 

Illinois  kaolin 5.0  5.0  5.0  5.0  7.0 

Glass  sand 5.0  5.0  5.0  5.0  5.0 

The  crucibles  of  Series  IV  were  tested,  together  with  those 
of  Series  III,  on  both  No.  3  and  Ml  brasses.  The  results  are 
given  in  table  9. 

TABLE  9 

Tests,  Series  IV 

Average  Number  of  Heats 

On  Brass      On  Brass  Average  on 

No.  3  Ml  No.  3  &  Ml 

A1 7.0                  8.5  7.75 

Bl 8.5  14.0  11.25 

B2 6.5  15.0  10.75 

B3 9.0  15.5  12.25 

B4 11.0  12.0  11.50 

The  results  indicate  an  improvement  in  the  life  of  the  cruci- 
ble by  replacing  Ceylon  with  the  prepared  granular  Alabama 
graphite.  A  comparison  of  Series  IV  with  Series  III  indicates 
in  general  a  decrease  in  the  life  of  crucibles  by  the  substitution 
of  the  prepared  granular  graphite  for  the  Alabama  flake.  It, 


776         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

therefore,  appears  that  there  is  nothing  to  be  gained  by  the 
conversion  of  the  flake  graphite  to  the  granular  form. 

Tests  on  Bond  Clays 

Since  the  function  of  the  bond  clay  is  to  bind  or  cement  the 
graphite  grains,  the  strength  of  the  crucible  at  melting  tem- 
peratures is  largely  dependent  upon  the  qualities  of  the  bond 
clay.  It  is  more  dangerous  to  employ  a  poor  bond  clay  than 
to  employ  an  inferior  grade  of  graphite  for  crucible  making. 

The  U.  S.  Bureau  of  Mines  Ceramic  Experiment  Station  is 
at  the  present  time  conducting  experiments  on  a  number  of 
bond  clays  in  order  to  classify  them  according  to  their  influ- 
ences upon  the  life  of  the  crucibles  under  foundry  practice. 
Twenty-one  clays  are  under  observation.  Nineteen  of  these 
are  domestic  clays,  one  is  an  English  clay  and  one  is  the  Ger- 
man Klingenberg  clay.  Nine  crucibles  were  made  for  each 
clay  to  be  observed  under  brass  melting  practice  and  five  for 
tests  under  steel  melting  conditions.  The  general  compositions 
of  the  crucibles  made  for  brass  melting  and  steel  melting  are 
as  follows : 

Composition — Brass  Melting  Crucibles 

Ceylon  graphite 45 

Pennsylvania  graphite 5 

Pot  shell 5 

Sand 5 

Bond  clay  to  be  tested 40 

Composition — Steel  Melting  Crucibles 

Ceylon  graphite 53 

Pennsylvania  clay 8 

Georgia  kaolin 12 

Sand 7 

Bond  clay  to  be  tested 20 

The  brass  melting  crucibles  were  tested  in  foundry  No.  1. 
After  the  crucibles  arrived  at  the  foundry  they  were  placed 
in  the  dryer  operated  at  100°  C.  to  receive  30  days'  drying 
treatment  before  testing; 


4 


*  Several  of  the  crucibles  were  used  by  mistake  soon  after  they  arrived  at  the  foundry 
and  no  record  of  their  service  was  kept.  These  crucibles  are  now  being  re-made  and  will 
be  tested  later.  The  report  as  here  given  is,  therefore,  incomplete  and  is  subject  to  revision 
on  completion  of  the  tests. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES 


777 


The  steel  melting  crucibles  were  tested  in  a  plant  making 
carbon  steel.  The  furnaces  are  of  the  rectangular  pit  type 
holding  six  crucibles.  The  crucibles,  which  are  No.  60  size, 
were  charged  with  about  100  pounds  of  metal  and  placed  above 
the  furnace  and  allowed  to  "warm  through"  before  they  were 
placed  in  the  furnace.  After  the  charge  had  melted  and 
reached  the  proper  pouring  temperature,  the  crucible  was 
lifted  from  the  furnace  by  tongs  and  poured  into  a  ladle  which 
held  the  charges  of  about  17  crucibles.  After  pouring  the 

TABLE  10 
Bond  Clay  Tests— Brass  Melting  Crucibles 

Number  Average 

Clay  Number  Kind  of  Clay  Crucibles  Number 

Tested  Heats 

313  Missouri  Pot  Clay 8  18.50 

309  Illinois  Kaolin  No.  1 2  17.50 

322  Klingenberg  Clay 9  17.33 

321  Mississippi  Bond  Clay 8  16.87 

304  Mississippi  Bond  Clay 5  16.40 

318  Kentucky  Ball  Clay  (Old)  No.  4 9  15.89 

325     Mississippi  Crucible  Clay  No.  21 1  15.00 

307  Illinois  Kaolin  No.  2 9  14.89 

315  Tennessee  Ball  Clay  No.  3 9  14.78 

320  Dorset  English  Ball  Clay 9  14.44 

308  Illinois  Kaolin  No.  3 9  14.33 

314  Mississippi  Bond  Clay  No.  5 1  14.00 

303  Mississippi  Bond  Clay  No.  15 9  13.89 

301  Missouri  Bond  Clay  No.  291 9  12.55 

316  Kentucky  Ball  Clay  (New)  No.  4 3  12.33 

319  Tennessee  Ball  Clay  No.  7 8  11.62 

310  Pennsylvania  Crucible  Clay,  H.  W.  R 9  9.22 

317  Kentucky  Ball  Clay  No.  6 9  7.00 

311  Pennsylvania  Bond  Clay  B 9  6.67 

306    Illinois  Kaolin  No.  3A 1  6.00 

302  Missouri  Pot  Clay  No.  69B 2  5.00 

crucible  was  immediately  recharged  and  again  set  in  the 
furnace.  It  required  from  4i/2  to  7  hours  to  melt  a  charge  to 
pouring  temperature  starting  with  a  cold  crucible,  and  from 
3  to  4%  hours  to  melt  a  charge  in  a  hot  crucible. 

The  results  of  the  tests  are  tabulated  in  the  order  of  service, 
grading  from  highest  service  down.  The  results  of  the  tests 
for  the  brass  melting  crucibles  are  given  in  table  10,  and  those 
for  steel  melting  in  table  11. 


778         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Tests  of  the  clays  in  brass  melting  crucibles  show  two  clays 
testing  higher  than  the  Klingenberg  clay.  In  the  steel  melting 
crucibles  the  Klingenberg  clay  ranks  fifteenth.  The  Dorset 
English  ball  clay  occurs  in  tenth  place  in  the  brass  melting 
crucibles  and  in  fifth  place  in  the  steel  melting  crucibles. 

The  tests  on  the  Missouri  pot  clay  (No.  313)  show  that  it 
is  decidedly  superior  to  the  Klingenberg  clay  for  both  brass 
and  steel  melting  crucibles.  Although  only  two  crucibles  con- 

TABLE  11 

Bond  Clay  Tests— Steel  Melting  Crucibles 

Number  Average 

Clay  Number  Kind  of  Clay  Crucibles  Number 

Tested  Heats 

318  Kentucky  Ball  Clay  (Old)  No.  4 4  10.00 

316  Kentucky  Ball  Clay  (New)  No.  4 5  9.20 

315    Tennessee  Ball  Clay  No.  3 5  9.00 

313  Missouri  Pot  Clay 5  8.60 

320  Dorset  English  Ball  Clay 5  8.40 

308  Illinois  Kaolin  No.  3 5  8.00 

304  Mississippi  Bond  Clay 5  7.60 

325  Mississippi  Crucible  Clay  No.  21 5  7.40 

303  Mississippi  Bond  Clay  No.  15 5  7.20 

306  Illinois  Kaolin  No.  3A 5  7.20 

314  Mississippi  Bond  Clay  No.  5 5  7.20 

317  Kentucky  Ball  Clay  No.  6 5  7.00 

319  Tennessee  Ball  Clay  No.  7 4  7.0O 

321  Mississippi  Bond  Clay 4  7.00 

322  Klingenberg  Clay 5  5.80 

309  Illinois  Kaolin  No.  1 4  4.67 

301  Missouri  Bond  Clay  No.  291 5  4.60 

310  Pennsylvania  Crucible  Clay,  H.  W.  R 5  4.00 

311  Pennsylvania  Bond  Clay  B 4  3.75 

302  Missouri  Pot  Clay  No.  69B 5  3.40 

taining  the  Illinois  Kaolin  No.  1  were  tested,  the  test,  together 
with  the  laboratory  tests  on  its  physical  properties,  indicates 
that  it  is  superior  to  the  Klingenberg  clay  for  brass  melting 
crucibles.  Thirteen  of  the  American  clays  tested  score  higher 
than  the  Klingenberg  clay  in  the  steel  melting  crucibles. 
Eight  American  clays  rank  above  the  Dorset  English  ball  clay 
in  the  brass  melting  crucibles,  and  four  rank  higher  in  the 
steel  melting  crucibles. 


GRAPHITES  FOR  CRUCIBLE  MAKING  PURPOSES  779 

All  the  above  clays  tested  are  recognized  by  the  trade  as 
bond  clays  of  excellent  qualities,  and  are  used  extensively  to 
improve  plasticity  and  bonding  strength  in  a  variety  of  ceramic 
mixtures — such  as  crucibles,  glass  pots,  saggers,  refractories, 
abrasive  wheels,  pottery,  etc. 

That  these  clays  vary  considerably  in  their  physical  prop- 
erties has  been  shown  by  careful  laboratory  experiments.5 
That  these  physical  properties  influence  the  life  of  the  cruci- 
ble from  5  to  more  than  18  heats  on  brass,  and  from  3.4  to  10 
heats  on  carbon  steel,  is  shown  by  the  results  of  the  foregoing 
tests. 

Clays  ranking  highest  in  the  brass  melting  crucibles  rank 
lower  down  the  scale  in  the  steel  melting  crucibles,  and  the 
reverse  is  also  true.  A  clay  which  may  be  inferior  as  a  bond 
for  graphite  crucibles  may  be  most  excellent  as  a  bond  for 
some  other  ceramic  purpose.  Clay  No.  302  is  a  good  illustra- 
tion. Although  it  ranks  lowest  in  both  the  brass  and  steel 
crucible  tests,  it  is  a  most  excellent  bond  clay  for  a  variety  of 
purposes,  and  more  especially  for  glass  pot. 

The  desirable  physical  properties  of  a  bond  clay  for  graphite 
crucible  making  purposes  are:  1,  sufficient  plasticity;  2,  high 
bonding  strength;  3,  low  shrinkage;  4,  resistance  to  sudden 
temperature  changes ;  5,  resistance  to  slagging  action ;  6,  offer- 
ing protection  to  the  graphite  from  oxidation;  7,  resistance 
while  hot  to  the  internal  pressure  of  molten  metal;  8,  high 
refractoriness  for  steel  melting  crucibles  and  9  medium  refrac- 
toriness for  brass  melting  crucibles. 

No  single  clay  scores  highest  in  all  these  physical  properties, 
but  by  careful  selection  and  blending  of  two  or  more  clays  it 
is  evident  that  a  clay  bond  can  be  built  up  which  will  give 
crucibles  of  better  service  than  can  be  produced  by  using  one 
clay  alone. 

This  is  as  far  as  the  work  has  progressed.  The  next  step 
in  the  work  will  be  the  selection  of  a  blended  clay  bond  for 
brass  melting  crucibles  and  a  suitable  bond  for  steel  melting 
crucibles.  These  clay  bonds  are  to  be  used  in  making  crucibles 
for  testing  the  different  foreign  and  domestic  graphites  offered 
by  the  trade  as  crucible  stock.  When  the  work  has  been  com- 


5  Booze,  M.  C.,  "Some  Properties  of  Bond  Clays  for  Graphite  Crucibles,"  Jour,  of  the 
American  Ceramic  Society,  Vol.  2,  No.  6,  June,  1919. 


780         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

pleted  it  is  hoped  that  the  resulting  data  will  enable  the  cruci- 
ble manufacturer  to  govern  his  crucible  compositions  more 
intelligently  in  the  production  of  better  crucibles  and  to  make 
us  nationally  independent  of  imported  crucible  materials  in 
case  of  emergency  or  when  occasion  demands. 


DEVELOPMENT  OF  HELIUM  781 


DEVELOPMENT  OF  HELIUM 

Paper  by  RICHARD  B.  MOORE,  Chief  Chemist,  U.  S.  Bureau  of  Mines, 

Delivered  at  the  Twenty-second  Annual  Convention,  American 

Mining  Congress 

During  the  solar  eclipse  of  1868,  Janssen  first  used  the  spec- 
troscope in  connection  with  such  observations.  A  bright  yellow 
line  was  observed  in  the  spectrum  of  the  chromosphere,  which 
is  an  envelope  of  incandescent  gases  surrounding  the  sun. 
Since  this  line  did  not  exactly  coincide  with  the  Di  and  D2 
lines  of  sodium,  it  was  called  the  Ds  line.  Afterward  Lockyer 
and  Franklin  showed  that  the  line  did  not  belong  to  any  ter- 
restrial element  and  proposed  the  name  "Helium"  for  the  un- 
known element  which  gave  rise  to  the  Ds  line. 

Discovery  of  Helium 

No  further  work  was  done  in  connection  with  this  observa- 
tion until  1894.  Sir  William  Ramsay  and  Lord  Rayleigh  had 
shortly  before  announced  the  discovery  of  argon  and  Ramsay 
was  looking  for  sources  of  argon  other  than  the  atmosphere  in 
which  it  exists  in  the  proportion  of  1  part  to  104  parts  of  air. 
Sir  Henry  Miers  called  his  attention  to  the  fact  that  Dr.  W.  F. 
Hillebrand,  now  Chief  Chemist  of  the  Bureau  of  Standards  and 
at  that  time  in  the  Geological  Survey,  had  obtained  a  gas  which 
he  supposed  to  be  entirely  nitrogen,  from  certain  minerals  con- 
taining uranium.  Ramsay  obtained  a  sample  of  one  of  these 
minerals — cleveite — heated  it  with  sulphuric  acid,  purified  the 
gas  from  oxygen,  nitrogen,  carbon  dioxide,  etc.,  and  ran  the 
residual  gas  into  a  spectrum  tube.  The  spectrum  showed  the 
bright  yellow  line  which  had  been  observed  by  Janssen  in  the 
chromosphere  and  the  measurement  of  its  wave  length  by 
Crookes  proved  that  the  lines  were  identical. 

Ramsay,  Kayser  and  Friedlander  afterward  showed  that 
helium  existed  in  the  atmosphere.  Ramsay,  during  his  work 
on  argon,  had  prepared  about  11  liters  of  argon  which  he  was 
saving  for  fractionation  purposes.  This  gas  was  liquefied  and 
the  first  faction  that  came  off  was  examined  spectroscopically. 


782         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

It  not  only  showed  the  Ds  line  and  some  of  the  other  lines  asso- 
ciated with  the  Ds  line  in  the  spectrum  of  helium,  but  it  also 
showed  a  large  number  of  very  bright  red  and  orange  lines 
which  belonged  to  a  new  element  which  he  called  neon.  Ram- 
say's original  measurements  indicated  that  helium  existed  in 
the  air  in  the  proportion  of  1  part  of  helium  to  250,000  parts 
of  air,  but  more  recent  measurements  by  Watson  give  1  part  in 
185,000  by  volume. 

Helium  is  found  in  the  gases  from  many  springs,  notably 
those  at  Bois,  France;  Railliere  in  the  Pyrenees;  Mazieres, 
Cote  d'Or;  and  at  the  Bath  Springs  in  England.  In  some  cases 
the  amount  of  helium  present  is  as  much  as  5  per  cent,  by 
volume. 


Helium  in  Radium 

It  also  exists  in  minerals  carrying  either  uranium  or  thorium, 
due  to  the  disintegration  of  the  radio-active  elements  present, 
with  the  elimination  of  alpha  particles,  which  are  charged 
helium  atoms.  Rutherford  predicted  without  any  direct  ex- 
perimental evidence  that  the  radio-active  alpha  particle  was  a 
helium  atom.  The  proof  of  this  was  obtained  by  Ramsay  and 
Soddy,  who  showed  that  the  radium  emanation  changed  to 
helium  by  actually  allowing  some  radium  emanation  obtained 
from  radium  to  stand  for  a  number  of  days  in  a  tiny  spectrum 
tube,  in  which  the  spectrum  of  helium  gradually  developed- 
Some  few  minerals  contain  helium  which  are  not  radio-active, 
or  in  which  the  radio-active  material  is  negligible,  such  as 
rutile  and  zircon.  It  is  also  found  in  some  of  the  Stasfurt  min- 
erals such  as  sylvine,  which  is  crystallized  potassium  chloride, 
and  carnollite,  a  crystalline  double  chloride  of  potassium  and 
magnesium.  Some  rock  salt  samples  also  contain  traces  of 
helium.  Various  explanations  have  been  offered  for  this  ap- 
parent anomaly,  but  none  of  them  seems  to  be  satisfactory. 

In  1907  Cady  and  MacFarland  found  that  a  number  of 
natural  gases  in  Kansas,  especially  around  Dexter  and  Eureka, 
contained  notable  quantities  of  helium,  some  of  them  carrying 
as  much  as  1%  per  cent,  of  helium  by  volume. 


DEVELOPMENT  OF  HELIUM  783 

Helium  in  War 

In  1915  it  came  to  the  attention  of  the  Bureau  of  Mines  that 
the  British  were  greatly  interested  in  the  possibility  of  using 
helium  in  dirigibles  for  war  purposes.  This  was  due  to  the 
fact  that  helium  is  not  inflammable  and  is  the  only  gas  which  is 
light  enough  to  take  the  place  of  hydrogen,  since  pure  helium 
has  92  per  cent,  of  the  lifting  power  of  hydrogen.  The  fact 
that  it  is  not  inflammable  gives  it  a  tremendous  advantage  over 
hydrogen  for  war  purposes.  A  few  days  after  we  entered  the 
war  the  Bureau  of  Mines  took  the  matter  up,  the  Army  and 
Navy  Departments  became  interested,  furnished  the  money, 
and  the  result  was  that  three  experimental  plants  were  built  in 
Texas  in  connection  with  the  Petrolia  natural  gas  supply,  which 
carries  .93  per  cent,  by  volume  of  helium.  Two  plants  were 
located  at  Fort  Worth,  using  the  Linde  process  and  the  Claude 
process  (air  reduction  process),  respectively.  A  third  plant, 
using  the  Jeffries-Norton  process,  was  placed  at  Petrolia, 
Texas,  where  the  natural  gas  wells  are  located. 

Costs  Now  Minimum 

Shortly  before  the  armistice  was  signed  the  Linde  plant  had 
obtained  the  best  results  and  it  was  decided  to  build  a  large 
production  plant  using  the  Linde  process.  Since  that  time  the 
two  experimental  plants  at  Fort  Worth  have  been  dismantled 
in  order  to  make  way  for  the  large  production  plant  which  is 
rapidly  nearing  completion.  The  plant  at  Petrolia,  using  the 
Jeffries-Norton  process,  started  after  the  other  two  and  is  still 
in  the  experimental  stage,  and  the  work  there  is  being  devel- 
oped with  the  idea  that  this  plant  may  ultimately  produce 
helium  more  cheaply  than  any  of  the  other  processes.  The 
production  plant  will  have  an  approximate  capacity  of  five 
million  cubic  feet  of  natural  gas  per  day.  Before  the  war 
helium  cost  about  $2,000  a  cubic  foot;  it  is  estimated  by  the 
Navy,  which  has  charge  of  the  construction  of  the  production 
plant,  that  the  operating  cost  of  the  helium  from  this  plant  will 
be  a  little  over  51/2  cents  a  cubic  foot. 

Helium  Not  Inflammable 

As  already  stated,  the  main  advantage  in  connection  with 
the  use  of  helium  in  dirigibles  lies  in  the  fact  that  it  does  not 


784         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

burn.  Most  of  the  dirigibles  destroyed  during  the  war  were 
brought  down  by  incendiary  bullets  from  airplanes.  An  air- 
plane would  have  no  chance  whatever  in  destroying  a  helium 
dirigible,  as  incendiary  bullets  would  be  just  as  harmless  as 
ordinary  bullets.  Punctures  of  the  gas  cells  by  bullets  would 
result  only  in  a  small  leakage  of  gas.  On  the  other  hand,  an 
airplane  attacking  a  helium  dirigible  would  have  a  hard  time, 
as  such  a  dirigible  could  concentrate  on  the  airplane  the  fire 
from  8  to  12  machine  guns,  and,  under  such  circumstances,  an 
airplane  would  likely  flee  from  a  helium  dirigible  rather  than 
attack  it.  When  it  came  to  a  fight  a  helium  dirigible  would 
easily  put  out  of  commission  a  hydrogen  dirigible,  the  relative 
efficiency  bearing  something  of  the  same  relation  as  an  ironclad 
to  a  wooden  ship. 

The  use  of  dirigibles  in  wartime  is  mainly  along  two  lines, 
that  of  acting  as  scouts  and  for  bombing  purposes.  The  first 
is  the  more  important,  but  great  damage  could  be  done  to  an 
enemy  where  an  airship  could  descend  low  enough  with  safety 
to  be  sure  of  making  direct  hits,  as  would  be  the  case  with  ships 
filled  with  helium. 

As  there  is  no  danger  from  fire,  it  will  be  possible  to  put  the 
engines  practically  in  the  framework  or  immediately  below, 
and  in  this  manner  get  a  more  direct  drive  from  the  engines 
and  a  higher  speed. 

Economical  Gas 

As  a  ship  with  a  capacity  of  three  million  cubic  feet  costs  to 
build  somewhere  around  80  cents  to  90  cents  a  cubic  foot 
capacity,  it  can  readily  be  seen  that  helium  at  5^  cents  per 
cubic  foot  is  a  valuable  asset  from  the  insurance  standpoint 
alone.  In  addition,  precautions  will  be  taken  in  the  construc- 
tion of  helium  airships  to  lose  as  little  gas  as  possible  and  the 
residual  gas,  after  contamination  with  the  air,  will  be  pumped 
out  and  repurified  by  small  conveniently  situated  purification 
plants. 

There  are  still  many  problems  to  be  worked  out  in  the  actual 
construction  of  the  airships  themselves  in  order  to  get  the  high- 
est efficiency  from  the  new  gas.  It  will  probably  be  at  least  a 
couple  of  years,  or  even  longer,  before  the  first  helium-filled 
dirigible  crosses  the  Atlantic,  but  when  this  event  takes  place 


DEVELOPMENT  OP  HELIUM  785 

it  will  be  an  epoch-making  one,  not  only  in  connection  with 
aeronautics,  but  also  in  connection  with  the  whole  science  of 
warfare. 

Helium  Would  Have  Won  War 

During  the  late  war  the  German  fleet  never  left  Kiel  Harbor, 
nor  any  of  the  other  ports,  without  being  attended  by  several 
hydrogen-filled  dirigibles.  These  airships  acted  as  scouts  for 
the  German  Navy,  and  were  able  to  apprise  it  not  only  of  the 
approach  of  the  British  fleet  but  also  of  the  type  of  vessels  and 
the  strength  of  the  fleet.  The  Germans  were  then  able  to  decide 
at  their  leisure  whether  they  would  or  would  not  accept  battle. 
One  or  two  helium  dirigibles  would  have  put  out  of  commission 
the  whole  German  air  fleet  and  would  have  left  the  German 
Navy  without  its  "eyes."  Such  a  condition  would  have  un- 
doubtedly resulted  in  the  ultimate  capture  or  destruction  of  the 
German  fleet  during  the  war  and  would  have  had  a  very  ma- 
terial effect  on  the  final  result. 

Investigating  Supply  Sources 

At  the  present  time  the  Helium  Board,  consisting  of  repre- 
sentatives of  the  Army  and  Navy,  with  the  Bureau  of  Mines 
co-operating,  is  investigating  all  sources  of  supply  of  helium  in 
this  country.  Helium-bearing  natural  gas  is  found  not  only  at 
Petrolia,  Texas,  but  also  at  a  number  of  places  in  Oklahoma, 
particularly  in  the  Osage  district,  in  southeastern  and  southern 
Kansas,  in  northern  Montana,  in  Vinton  County,  Ohio,  and  in 
other  localities.  It  is  estimated  that  at  the  present  time  as 
much  as  five  hundred  thousand  cubic  feet  per  day  of  helium  is 
going  into  our  atmosphere  from  these  fields.  It  is  the  desire 
of  the  Government  to  make  a  complete  survey  of  the  country, 
so  as  to  know  just  what  our  resources  of  this  extremely  valu- 
able gas  are. 

United  States  Has  Largest  Supply 

Outside  of  the  United  States  there  are  only  two  localities  in 
the  whole  world  which  appear  at  the  present  time  to  have  any 
commercial  importance  as  a  source  of  this  gas.  It  is  estimated 
that  about  ten  million  cubic  feet  of  helium  per  annum  could  be 


786         PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

produced  from  the  Canadian  natural  gas  which  supplies  the 
town  of  Calgary.  In  Italy  there  are  some  steam  vents  in 
Tuscany,  which  are  commonly  called  suffioni,  that  carry 
helium.  This  source  might  supply  as  much  as  ten  million  cubic 
feet  of  helium  per  annum  to  the  Italians.  The  gas  at  Calgary 
is  low  grade,  carrying  only  about  .3  of  a  per  cent,  helium,  but 
the  helium  could  undoubtedly  be  obtained  without  great  diffi- 
culty from  the  suffioni.  These  two  sources  of  supply,  while 
interesting  and  important,  are  small  in  comparison  with  the 
known  sources  we  have  in  this  country.  America  at  the  present 
time,  therefore,  is  paramount  as  a  source  of  commercial  helium. 

Protective  Measures  Advised 

It  is  difficult  to  state  just  what  will  take  place  in  connection 
with  the  private  commercial  development  of  this  gas  for  trans- 
portation purposes.  Already  one  company  has  been  organized, 
but  it  seems  to  be  strongly  advisable  that  the  gas  shall  not  be 
exported  from  this  country,  as  it  could  be  sold  to  and  stored  by 
nations  with  whom  we  might  some  day  have  a  combat  and  we 
would  thus  lose  the  very  material  benefit  and  advantage  which 
we  have  at  the  present  time. 


GENERAL  INDEX  787 

GENERAL  INDEX 

THE  AMERICAN  MINING  CONGRESS 

Annual  Address  of  Mr.   Bulkeley  Wells,  President   239 

Coal   Export  Committee   Report   117,   120 

Credentials    Committee     10 

Delegates  in  Attendance   166 

Election  of  Officers    34 

Executive  Committee    34 

Exposition — Opening  Exercises   8 

Gold   Conference — Resolutions    Committee    47 

International  Delegates   27,     30 

Membership  Annual  Banquet   24 

Members'   Annual  Meeting    132 

Oil  Shale  Section — Report  of  Committee  on  Permanent  Organization 107 

Report  of   Nominating   Committee    132 

Report  of  Secretary,  J.   F.  Callbreath   132 

Report  of  Resolutions   Committee    144 

Resolutions    Committee    14 

Standardization  of  Mining  Equipment — Report  of  Committee 326 

GENERAL   ADDRESSES 

Address  of  Welcome— Hon  X.  P.  Wilfley,  in  behalf  of  Governor  of  Missouri 234 

Address   of  Welcome — Elmer  Donnell,   General  Manager  of   Associated  Industries   of 

Missouri,  in  behalf  of  Missouri  Employers 5 

Address  of  Welcome — Robert  E.  Lee,  Vice-Chairman  of  the  Exposition  Committee. .       4 

Address  as  Toastmaster — Annual  Dinner — Robert  E.  Lee   24 

Alabama  Graphite— A.   E.   Smith   129 

Alaska — John    A.    Davis    474 

American  Citizenship — Hon.  A.  H.  Roberts,  Governor  of  Tennessee 751 

Americanism — Congressman  J.   G.   Strong,  of  Kansas   379 

American  Quicksilver  Problems — Fletcher  Hamilton  738 

American  Tungsten  Situation — Hon.  E.  C.  Voorheis   741 

Arizona  Taxation  Methods — C.   M.    Zander    226 

Cause  of  Labor  Discontent — James  Taylor 684 

Coal  Versus  Oil  in  Power  Production — Charles  S.  Allen   668- 

Does  Safety- First  Mean  Increased  Dividends  ? — W.  D.  Ryan   612 

Effect  of  Railway  Rates  on  the  Mining  Industry — Clifford  Thome   278 

Federal  Income  and  Profits  Taxes  as  Applied  to  Mines — A.  P.  Ramstedt  207 

Gold  Excise  and  Premium  Proposal    (Paper) — John  Clausen    518 

Gold  Mining  Industry,  Present  Condition  of    (Paper) — George  E.  Roberts 512 

Government  and  the  Gold  Producer — Eugene  Davis    644 

Industrial   Clean-up — R.   Dawson   Hall    717 

Industrial  Conditions  in  England — Rev.   C.  W.  Gordon    392 

Industrial   Democracy — John   Leitch    487 

Invocation — Bishop    Wm.     E.    Quayle    4 

Ig  the  Oil  Shale  Industry  a  Business  Proposition  ? — J.  B.  Jones   634 

Labor  and  Its  Responsibilities— Charles  Piez  603 

Labor  Conciliation  in  the  Anthracite  Industry— Dr.  E.  W.  Parker  309 

Labor  Situation  in  Coal  Production— Telegram  from  H.  N.  Taylor,  President  National 

Coal  Association   20 

Lands  and  Mineral  Resources  of  Minnesota — Hon.  F.  A.  Wildes   471 

Minerals  Separation,  Ltd. — George  L.  Nye 420 

Mine  Accounting  in  Relation  to  Federal  Taxes  (Paper) — Wade  Kurtz   166 

Minnesota  Tax  Commission— Dr.  Rukard  Kurd   230 

Oil  Shale  Industry — Dr.   Victor  C.  Alderson    616 

Our   Industries'   Part— Dr.   George   Otis   Smith,   Geological  Survey 317 

Our  Pressing  Railway  Problem — Samuel  O.  Dunn  265 

Physical  Efficiency  and  Its  Effect  on  Production — E.  Dana  Caulkins   416 


788        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Practical  Methods  of  Conducting  a  National  Accident  Prevention  Drive — A.  F.  Duffy. .  661 
Present   Problems   of   the  Mining   Industry — Dr.    Van   H.    Manning,   Director   of   the 

Bureau  of  Mines    244 

Price  Fixing  by  the  United  States  Fuel  Administration — Edwin  Ludlow 711 

Problems  of  the  Oil  Industry — Ralph  Arnold    214 

Proposed  First-Aid  and  Mines-Safety  Society — Dr.  J.  J.  Rutledge  and  Noel  Hubbard.  .  597 

Proposed  Model  Tax  Method  of  National  Tax  Association   229 

Proposed  Solution  of  the  Complex  Gold  Problem— H.  N.  Lawrie 526 

Protection  Against  Unjust  Taxation  of  Mines  (Paper) — T.  O.  McGrath 195 

Putting    Our  Railroads  on  a   Business  Basis — Alba   B.   Johnson    258 

Racial  Characteristics  and  Their  Effect  in  Industry — Thomas  T.  Read   583 

Readjusting  America — Hon.  Frederick  D.  Gardner,  Governor  of  Missouri   374 

Real  Russia— Hon.   Fedor  F.  Foss    385 

Red  Menace,  The— Rev.  C.  W.    Gordon    365 

Ruling  Passion,  The— Allen  Walker   351 

Russian  Radical  as  I  Found  Him,  The — George  W.  Simmons   343 

Safety  Welfare  and  Industrial  Relations  Work— C.  W.   Seiberling   588 

-Some  Problems  of  the  American  Oil  Shale  Industry — M.  J.  Gavin   646 

Stabilization  of  the  Coal  Market — J.  C.  Thompson   691 

Statement  as  Chairman  of  National  Gold  Conference — H.  W.  Seaman   37,  52 

Statement  as  Chairman  of  War  Minerals  Relief  Commission — Hon.  John  F.  Shafroth  70 

Statement  in  Behalf  of  Black  Hills  Gold  Producers — Dr.  A.  T.  Roos 43 

Statement  in  Behalf  of  California  Gold  Producers — Fletcher  Hamilton   50 

Statement  in  Behalf  of  Gold  Producers — George  M.  Taylor 41 

Statement  of  American  Mining  Congress  War  Minerals  Division  Work — H.  W.  Smith . .  66 

Statement  on  Gold  Situation— H.  N.  Lawrie 37 

Statement  on  Mexican  Resolution — Sr.  E.  E.  Martinez  161 

Statement  on  War  Minerals  Situation— J.  F.  Callbreath  62 

Taxation  of  Income  from  Mining   ( Paper)  — George  E.  Holmes   ISO 

Work  of  the  Tariff  Commission — Hon.  E.  P.  Costigan   726 

War  Minerals  Relief  Situation— Philip  N.  Moore   550 

TECHNICAL  PAPERS  AND  ADDRESSES 

Business  Training  in  Mining  and  Metallurgical  Curricula — TT.  L.  E.  Young 560 

By-Product    Coking — Joseph    D.    Davis    297 

Closer  Co-operation  of  the  Colleges,  Bureau  of  Mines,  and  Industrial  Corporations — 

E.    A.    Holbrook    576 

Federal  Regulation  of  Explosives — Clarence  Hall 441 

Graphites  and  Bond  Clays  for  Crucible  Making  Purposes — Dr.  R.  T.  Stull 766 

Helium — Dr.  R.  B.  Moore 781 

Holmes   Safety  Association — Annual   Report    293 

Holmes  Safety  Association   (Joseph  A.) — Telegram  from  David  T.  Day,  Secretary 15 

Geological  Problems  in  Mining  Oil  Shale — George  S.  Rice 110 

-  Oil  Shale  Distillation— Statement  by  George  W.  Wallace   104 

Practical  Uses  of  Explosives  from  a  Safety  Standpoint — R.  H.   Sumner   407 

Standardization  of  the  Coals  for  the  Trade — George  S.  Rice 699 

Standardization  of  Mining  Equipment — Report  of  Committee   326 

Transmission,  Modern  Application  of — J.  W.  Ferguson  462 

TELEGRAMS,   MESSAGES  AND   GENERAL  ITEMS,   FROM 

David  T.  Day,  Secretary,  Holmes  Safety  Association   15 

Gov.   Frank  O.   Lowden,  of  Illinois    35 

Gov.  J.   B.  A.  Robertson,  of  Oklahoma  25 

Gov.  Charles  H.  Brough,  of  Arkansas    142 

Hon.  Frank  W.  Mondell,  Member  Congress    25 

H.  N.  Taylor,  President,  National  Coal  Association 20 

United  States  Senator  Miles  Poindexter   25 

RESOLUTIONS 

Alaska    147 

American   Rights   Abroad    145 

Coal  Production    .  151,  154,  155 


GENERAL  INDEX  789 

Coinage   Destruction    146 

Copper   152 

Forestry  and  Mineral  Claims    150 

Gold    Prospectors    149 

Gold  Excise  Tax  Proposal    157 

Indian   Coal   Lands    152 

Mexican  Situation    160 

Minerals  Separation,  Ltd 153 

Mines   Experiment  Stations    145 

On  Gold — Adopted  by  American  Bankers'  Association   38 

Physical    Efficiency    155 

Presented  for  Consideration  of  National  Gold  Conference 61 

Protesting  Against  Murder  of  American  Mining  Engineers  in  Mexico 17 

Radicalism     148 

Railroad  Legislation    147 

War   Minerals    151 

SPECIAL  SECTIONS  OF  THE  CONVENTION 

Coal    Section    118 

Mines  Taxation  Section 120 

National  Gold  Conference 87 

Oil    Shale    Conference    95 

Safety  and  Welfare  Section   92 

Schools  of  Mines  and  Metallurgy 91 

Tariff    Conference    122 

War  Minerals  Conference  62 

SPEAKERS 

Alderson,  Dr.  Victor  C. — Statement  as  Chairman  of  the  Oil  Shale  Conference 95 

—Oil  Shale  Industry   616 

Allen,  Charles  S.— Coal  Versus  Oil  in  Power  Production   668 

Arnold,  Ralph— Problems  of  the  Oil  Industry  214 

Brough,  Governor  Charles  H. — Message  from   142 

Callbreath,  J.   F.,   Secretary  of  The  American  Mining  Congress — Statement  on  War 

Minerals    Situation    62 

Caulkins,  E.  Dana— Physical  Efficiency  and  Its  Effect  on  Production   415 

Clausen,  John — Paper  on  Gold  Excise  and  Premium  Proposal   518 

Costigan,  Hon.  E.  P. — Work  of  the  Tariff  Commission   726 

Davis,  Eugene — The  Government  and  the  Gold  Producer   544 

Davis,  John  A. — Alaska,  a  National  Opportunity   474 

Davis,   Joseph   D. — By-Product   Coking    297 

Donnell,   Elmer — Address  of  Welcome  in  Behalf  of  Missouri  Employers    5 

Duffy,  A.  F. — Practical  Methods  of  Conducting  a  National  Accident  Prevention  Drive  661 

Dunn,    Samuel   O. — Our  Pressing  Railway  Problem    265 

Ferguson,  J.  W. — Modern  Application  of  Transmission   462 

Foss,  Hon.  Fedor  F.— The  Real  Russia   885 

Gardner,  Hon.  Frederick  D.,  Governor  of  Missouri — Readjusting  America   374 

Gavin,  Martin  J.— Some  Problems  of  the  American  Oil  Shale  Industry  646 

Gordon,  Rev.  Charles  W. — The   Red   Menace 365 

— Industrial   Conditions   in    England    392 

Hall,  Clarence — Federal  Regulation  of  Explosives   441 

Hall,  R.  Dawson— The  Industrial  Clean-up    717 

Hamilton,  Fletcher — Statement  on  Gold   50 

— American    Quicksilver   Problem    738 

Holbrook,    E.   A. — Closer  Co-operation   of  the   Colleges,  U.   S.   Bureau  of  Mines   and 

Industrial   Corporations    576 

Holmes,  George  E. — Taxation  of  Income  from  Mining  180 

Hurd,   Dr.   Rukard — Minnesota   Tax    Commission    230 

Johnson,  Alba  B. — Putting  Our  Railroads  on  a  Business  Basis  258 

Jones,  J.  B. — Is  the  Oil  Shale  Industry  a  Business  Proposition  ? 634 


790        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Kurtz,  Wade — Mine  Accounting  in  Relation  to  Federal  Taxes    (Paper) 166 

Lawrie,  Dr.  H.  N. — Statement  on   Gold   Situation    37 

— Proposed  Solution  of  the  Complex  Gold  Problem 526 

Lee,  Robert  E.,  Vice-Chairman  Exposition  Committee — Address  of  Welcome 4 

Leitch,  John — Industrial  Democracy    487 

Leopold,  Morton  F. — Statement  as  Chairman  Safety  and  Welfare  Section 92 

Lowden,  Governor  Frank  O. — Telegram  from   35 

Ludlow,   Edwin— Price  Fixing  by  United  States  Fuel  Administration 711 

Manning,  Dr.  Van  H.,  Director  of  Bureau  of  Mines — Present  Problems  of  the  Mining 

Industry    244- 

Martinez,  Sr.  E.  E.,  Mexican  Delegate— Statement  on  Mexican  Resolution 161 

McGrath,  T.   O. — Protection  Against  Unjust  Taxation  of  Mines    19£ 

Mondell,  Hon.   Frank  W. — Telegram  from    25 

Moore,  Phillip  N.— War  Minerals  Relief  Situation    55O 

Moore,  Richard  B. — Development  of  Helium  781 

Nye,  George  L. — Minerals  Separation,  Ltd 420 

Parker,  Dr.  E.  W.— Labor  Conciliation  in  the  Anthracite  Industry   309 

Payne,  Dr.  Henry  Mace — Report  as  Chairman  of  Coal  Export  Committee 117,  120 

Piez,  Charles— Labor  and  Its  Responsibilities 503 

Poindexter,  Senator  Miles — Telegram  from 25 

Quayle,  Bishop  Wm.  E. — Invocation    4 

Ramstedt,  A.  P. — Federal  Income  and  Excess  Profits  Taxes  as  Applied  to  Mines 207 

Read,  Thomas  T. — Racial  Characteristics  and  Their  Effect  in  Industry   58$ 

Rice,  George  S. — Geological  Problems  in  Mining  Oil  Shale    110 

— Standardization  of  Coals  for  the  Trade   699 

Roberts,  Col.  Warren  R. — Report  as  Chairman  of  Standardization  of  Mining  Equip- 
ment   Committee    326 

Roberts,  George  E. — Paper  on  Present  Conditions  of  the  Gold  Mining  Industry 512 

Roberts,  Governor  A.  H. — American  Citizenship    751 

Robertson,  Governor  J.  B.  A. — Message  from  25 

Roos,  Dr.  A.  T.— Statement  in  Behalf  of  Black  Hills  Gold  Producers   43 

Rutledge,  Dr.  J.  J.— Proposed  First-Aid  and  Mine-Safety  Society   597 

Ryan,  W.  D.— Does  "Safety-First"  Mean  Increased  Dividends  ? 612 

Seaman,  H.  W. — Statement  as  Chairman  of  National  Gold  Conference 37,     52 

Seiberling,   C.   W.— Safety  Welfare  and   Industrial  Relations  Work 588- 

Shafroth,  Hon.  John — Statement  as  Chairman  of  War  Minerals  Relief  Commission. .     70 

Simmons,   George  W. — The  Russian  Radical  as  I  Found  Him    343 

Smith,   A.    E. — Alabama   Graphite    129 

Smith,  Dr.  George  Otis,  Director  of  Geological  Survey — Our  Industries'  Part 317 

Smith,  H.  W.— Statement  on  War  Minerals  Situation  and  Report  of  Efforts  of  Ameri- 
can Mining  Congress  in  Behalf  of  War  Minerals  Relief 66 

Strong,  Hon.  John  G. — Americanism  379 

Stull,  Dr.   R.  T. — Paper  on  Graphites  and  Bond  Clays  for  Crucible  Making  Purposes  766 

Sumner,  R.  H. — Practical  Uses  of  Explosives  from  a  Safety  Standpoint   407 

Taylor,  George  M.— Statement  in  Behalf  of  Gold  Producers  41 

Taylor,   H.  N.,  President  National  Coal  Association— Telegram  from 20 

— Labor  Situation  in  Coal  Production..     20 

Taylor,    James — Cause  of   Labor  Discontent    684 

Thompson,  J.  C.— Stabilization  of  the  Coal  Market 691 

Thome,  Clifford— The  Effect  of  Railway  Rates  on  the  Mining  Industry 278 

Voorheis,   Hon.   E.   C. — American  Tungsten   Situation    741 

Walker,  Allen— The  Ruling  Passion    351 

Wallace,  George  W.— Oil  Shale  Distillation 104 

Wells,   Bulkeley,  President  of  The  American  Mining  Congress — 

Statement  as   to   Gold   Production    44 

Annual   Address    239 

Wildes,  Hon.  F.  A.— Lands  and  Mineral  Resources  of  Minnesota  471 

Wilfley,  Hon.  X.  P.— Address  of  Welcome  in  Behalf  of  Governor  of  Missouri 234 

Young,  Dr.  L.  E.— Business  Training  in  Mining  and  Metallurgical  Curricula 560 

Zander,  C.  M.— Arizona  Taxation  Method  . .  . .   226 


OFFICERS  AND  DIRECTORS 

The  American  Mining  Congress 
1920 


OFFICERS 


BULKELEY  WELLS,   President 
HARRY   L.   DAY,   Vice-President 

D.  B.  WENTZ,   Second  Vice-President 

E.  L.    DOHENY,    Third   Vice-President 
J.   F.   CALLBREATH,   Secretary 

841  Munsey  Building, 

Washington,   D.   C. 
JOHN  T.  BURNS,  Assistant  Secretary 


GEO.   H.   BAILEY,  Counsel 
HAROLD  N.  LAWRIE,  Economist 
H.  W.  SMITH,  Chief, 

War  Minerals  Division 
ROBT.   G.  WILSON,  Director, 

Federal  Tax  Information  Service 
T.  R.  MOSS,  Editor, 

Publication   Department 


DIRECTORS 


THOMAS  T.   BREWSTER, 

1012  Federal  Reserve  Bank  Bldg. 

St.  Louis,  Mo. 
BULKELEY  WELLS, 

201   Fourteenth   Street, 

Denver,   Colo. 
COL.  D.   B.  WENTZ, 

Land   Title  Building, 
Philadelphia,  Pa. 
JOHN  C.  HOWARD, 
Newhouse  Building, 

Salt  Lake  City,  Utah 
SAMUEL  A.  TAYLOR, 

Second  National  Bank  Building, 

Pittsburgh,   Pa. 
L.  A.   FRIEDMAN, 
Lovelock,  Nev. 


CARL   SCHOLZ, 

Virginian  Land  Bank  Building, 

Charleston,  W.   Va. 
HARRY   L.   DAY, 
Wallace,  Idaho 
CHARLES  S.  KEITH, 

Keith  &  Perry  Building, 

Kansas  City,  Mo. 
WALTER  DOUGLAS, 
99   John   Street, 

New  York,  N.  Y. 
E.    L.    DOHENY, 

1015   Security  Building, 
Los  Angeles,  Calif. 
E.  P.  MATHEWSON, 
42   Broadway 

New  York  City 


BULKELEY  WELLS 


EXECUTIVE  COMMITTEE 

WALTER   DOUGLAS 


E.    P.    MATHEWSON 


STATE  CHAPTERS 

The  American  Mining  Congress 
1920 

ALABAMA  CHAPTER,  COLORADO   CHAPTER, 

John  N.  Vincent,  Secretary,  M.  B.  Tomblin,  Secretary, 

1308  American  Trust  &  Savings  Bank  Tabor  Opera  House  Block,  Denver, 

Bldg.,  Birmingham,  Ala.  Colo. 


ARIZONA  CHAPTER, 
J.  E.  Curry,  Secretary, 
Bisbee,   Ariz. 

CALIFORNIA  METAL  AND  MINERAL 
PRODUCERS*  ASSOCIATION, 
(Chapter  of  A.  M.  C.), 
Robert  I.    Kerr,   Secretary, 

625  Market  St.,  San  Francisco,  Calif. 


UTAH    CHAPTER, 

A.   G.   Mackenzie,  Secretary, 
306  Boston  Bank  Bldg., 
Salt  Lake  City,  Utah. 

KANSAS-OKLAHOMA-MISSOURI 
CHAPTER, 

K.  L.  Koelker,  Secretary, 
Joplin,  Mo. 


ALASKA  CHAPTER, 

John  A.  Davis,  Governor, 
Fairbanks,  Alaska. 


STATE  VICE-PRESIDENTS 

The  American  Mining  Congress 
1920 

ALABAMA    J.   B.   McClary    Birmingham 

ALASKA    John  A.  Davis    Fairbanks 

ARIZONA    Norman  Carmichael   Clifton 

ARKANSAS    Ross  Blake Cushman 

CALIFORNIA Geo.  W.   Starr    Grass  Valley 

COLORADO    Geo.  E.  Collins   Denver 

GEORGIA    Geo.  L.  Pratt Atlanta 

IDAHO    Jerome   J.   Day    Wallace 

INDIANA    J.  C.  Kolsem  Terre  Haute 

ILLINOIS    H.  C.  Adams  Chicago 

NEW   MEXICO    John  M.  Sully Hurley 

NEW  YORK Sidney  J.  Jennings   New  York 

KANSAS    O.  M.  Bilharz    Baxter  Springs 

KENTUCKY     Alexander  Blair,  Jr Baskett 

MAINE     C.   Vey  Holman    Rockland 

MASSACHUSETTS    Frank  P.  Knight  Boston 

MICHIGAN    Gordon  R.  Campbell   Calumet 

MINNESOTA   Charles   W.   Potts  , .Deerwood 

MONTANA    ...Charles  Booking Butte 

MISSOURI Edgar  Z.  Wallower Joplin 

NEBRASKA    Frank  A.  Manley Omaha 

NEVADA C.   B.  Lakenan    McGill 

NORTH    DAKOTA    Hansen  Evesmith Fargo 

OHIO W.  R.  Woodford    Cleveland 

OREGON    Robert  M.  Betts   Cornucopia 

OKLAHOMA     J.  F.  Robinson   Miami 

PENNSYLVANIA    S.  D.  Warriner Philadelphia 

SOUTH  CAROLINA   H.  L.  Scaife   Clinton 

TENNESSEE   J.  M.  Overton  Nashville 

UTAH   Imer  Pett  Salt  Lake  City 

VIRGINIA Lee  Long   Dante 

WASHINGTON    Conrad  Wolfle Spokane 

WISCONSIN     O.  C.  Irwin  Berlin 

WEST  VIRGINIA Geo.  T.  Watson Fairmont 

WYOMING    Hon.  B.  B.  Brooks Casper 


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^ 


10m-4,'23 


YC  01631 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


